Q&A with the Pennsylvania Department of Revenue

What are the PA PIT tax consequences of a conversion of a PA S Corporation to a limited partnership, and would the transaction be subject to tax?

Jan 22, 2018
Historically the department treated this transaction as the termination of one entity and the creation of a new entity. This was the general rule prior to 2015 since the Commonwealth did not have a conversion statute. There is no definitive policy at this time and the department is considering the effect of the 2015 statute. 

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These documents provide a summary of the answers provided by the Department of Revenue to the PICPA Committee on State Taxation at its annual question and answer session. These documents are classified as revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on their specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.