Bill · S. 2095· Senate(119-S-2095)
PARTNERSHIPS Act
- Introduced
- 6/17/2025
- Last activity
- 6/17/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Ron Wyden
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
The "PARTNERSHIPS Act" aims to amend the Internal Revenue Code of 1986 to improve rules regarding partners and partnerships. The bill introduces the "consistent percentage method" for certain covered partners and partnerships to determine distributive shares. It also modifies how partnership debt, property revaluations, and basis adjustments are handled. Additionally, the bill applies the net investment income tax to the trade or business income of certain high-income individuals. It includes provisions regarding the recognition of gain on transfers to swap funds and the treatment of certain losses. Finally, it codifies an anti-abuse rule to allow the Secretary to modify transactions that do not reflect economic reality.
Yes· 3 of 5
Does this give the federal government more power?+3
The bill expands the Secretary of the Treasury's authority to modify transactions that do not reflect economic reality.
Does this cut taxes for small businesses?+2
The bill provides basis adjustment flexibility for qualified small business partnerships.
Does this make it easier to run a small business?+2
It offers specific basis adjustment rules for qualified small business partnerships.
The opposite· 3 of 6
Would high-income households be better off under this?-6
The bill targets high-income individuals with increased tax applications on trade or business income.
Would people with substantial wealth be better off under this?-5
The bill implements stricter rules and potential taxes that impact high-income earners and large partnerships.
Would the very wealthiest people be better off under this?-5
Who it would affect, and how
Potential Positive Impacts for People
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Consistency in Distributive Shares: The bill introduces a "consistent percentage method" to ensure a covered partner's distributive share bears the same ratio to the aggregate distributive shares as their net equity bears to the total net equity of all covered partners (Section 2).
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Flexibility for Small Businesses: The bill limits certain basis adjustments to "qualified small business partnerships," which are defined by meeting a gross receipts test (Section 12).
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Tax Payment Options: For taxpayers recognizing gain due to certain partnership liability allocations, the bill allows an election to pay the net tax liability in six equal annual installments (Section 11).
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Clarification of Loss Timing: The bill changes the timing for treating losses from capital assets that become worthless, moving from the last day of the taxable year to the time of the identifiable event (Section 15).
Potential Negative Impacts for People
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Increased Tax for High-Income Individuals: The net investment income tax is modified to apply to the greater of specified net income or net investment income for individuals exceeding certain income thresholds, such as $400,000 for individuals or $500,000 for joint filers (Section 13).
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New Tax on Excess Shares: Covered partners who have an "excess share" relative to their net equity may be treated as receiving a partnership interest, which would be included in their gross income (Section 2).
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Restrictions on Basis Adjustments: The bill limits the ability of certain partnerships to elect adjustments to the basis of partnership property, making these adjustments mandatory for others (Section 12).
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Increased Oversight and Authority: The bill codifies an anti-abuse rule that gives the Secretary authority to recast, disregard, or modify transactions if they do not clearly reflect the partners' income or economic agreement (Section 16).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For High Income Households-6Good For Billionaires-5Good For High Net Worth Individuals-5Good For Ultra High Net Worth Individuals-5Good For Business Owners-2
- Governance And Ideology
- Increases Federal Power+3
- Economy And Finance
- Improves Small Business Support+2Reduces Small Business Taxes+2Improves Fiscal Responsibility+1Reduces National Debt+1Increases Wealthy Taxes-5
- 6/17/2025
- Read twice and referred to the Committee on Finance.
- Introduced in Senate