Tax Impact on LLC's will change July 1, 2009

The Tennessee General Assemby recently enacted just before the end of the current session, a " Technical Corrections Bill". This statute modified the family-owned noncorporate entity exemption under Tennessee tax law. The exemption will no longer apply to rent from industrial and commercial property and some farm property. An exemption still exists if the entity elects by October 1, 2009 to waive the limited liability protection granted by statute. Another option is to convert the entity to a limited partnership. At this time it appears that family owned entities receiving substantally all of its income from residential real property will be exempt as long as the property owned by the entity has no more than four residential units on it. I will post any additional information I receive on this new statute as soon as it becomes available. At last notice this bill was waiting on the Governor's signature.