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Tax Considerations in Drafting LLC Operating Agreements (Update)

(634 reviews)

Produced on December 06, 2019

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$ 89 Contract, Tax, and Business, Corporate, & Securities In Stock
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Course Information

Time 61 minutes
Difficulty Intermediate

Course Description

A limited liability company’s operating agreement must address many topics – who are the members and who can become members, how decisions will be made, how the business will be capitalized, and how profits will be shared, just to name a few. But many attorneys fail to appreciate the degree to which the tax treatment of an LLC and its members is driven by the contents of its operating agreement. In this program, tax and corporate attorney Jason Navarino will discuss the various tax topics that a well-drafted operating agreement should cover, including entity classification for income tax purposes, how to allocate profits and losses in a manner that will be respected by the IRS and potentially benefit the members, tax distributions, withholding and tax reporting obligations, tax issues that arise in the case of transfers, how to deal with audits and tax proceedings, and how to ensure that tax-preferred profits interests are respected as such.  The program will also address several recent changes in the underlying tax law, including under the Tax Cuts and Jobs Act of 2017, and how these changes should be addressed in operating agreements.

Learning Objectives:

  1. Recognize the differences between classification as a disregarded entity, partnership, and S corporation
  2. Gain familiarity with the forced/target allocation method so that clients can achieve their desired economic deals and still have their tax allocations respected by the IRS
  3. Examine the difference between profit distributions and guaranteed payments, and how to use this distinction to maximize qualified business income deductions
  4. Navigate operating agreement provisions with respect to tax distributions, withholding, tax returns, and audits
  5.  Explore the tax issues that arise in connection with membership interest transfers
  6. Identify how to create profits interests that can be issued without exposing the recipient to upfront tax liability

Credit Information

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Jason Navarino

Riker Danzig Scherer Hyland & Perretti LLP

Jason D. Navarino is a Partner in Riker Danzig’s Corporate and Tax Groups. He has considerable experience advising both large and small business clients with respect to structuring and documenting domestic and cross-border mergers and acquisitions and joint ventures in a tax-efficient and tax-compliant manner, forming operating and investment partnerships and limited liability companies, managing other related tax and corporate matters and advising clients on their day-to-day business. Mr. Navarino also counsels nonprofit and tax-exempt organizations with respect to tax, corporate, employment and intellectual property matters.

Mr. Navarino has been named as one of the NJBIZ Forty Under 40 recipients for 2016. In 2015, Mr. Navarino was named a “New Leader of the Bar” by the New Jersey Law Journal. Thomson Reuters has included Mr. Navarino on its Super Lawyers “Rising Star” list since 2014.

Mr. Navarino received his J.D. degree from Yale Law School in 2007, where he was Senior Editor of the Yale Law Journal and Director of the Community and Economic Development Clinic and its Small Business Legal Services program. He received his undergraduate degree, summa cum laude, from the Woodrow Wilson School of Public and International Affairs at Princeton University in 2004. He completed his LL.M. degree in Tax Law at New York University School of Law in 2013.

Mr. Navarino currently serves as Chair of the Taxation Law Section of the New Jersey State Bar Association, and Chair of that section's International Taxation Committee. He is also the President of the New York Future Problem Solving Program, Inc. as well as Secretary of the Future Problem Solving Program of New Jersey, Inc., and a member of the Legal,Wealth and Tax Advisory Committee of the Community Foundation of New Jersey.

Mr. Navarino served as a Law Clerk to the Honorable Barry T. Albin, Associate Justice of the Supreme Court of New Jersey. Prior to joining Riker Danzig, he was an associate at Debevoise & Plimpton LLP in New York. He is admitted to practice law in New Jersey and New York.


Loretta K.

The first part was helpful. I'm not a tax attorney and the second half was more for someone with more experience in taxation.

David N.

Too fast - hard to track and retain some of these very complex concepts.

Peter O.

Nicely presented

Richard C.

Excellent presentation.

Michael G.

Very clear. Great job.

Michael D.

Congress should watch this and change the IRS code to simplify it. Only an Attorney or a CPA can follow these complicated code provisions.

Anne P.

Excellent presentation.

gary m.

I've been drafting Operating Agreements for 20 years, and this still taught me new things

Edward M B.

Excellent presentation by Mr. Navarino!

john k.

Excellent presentation

Kevin S.

excellent speaker and presentation

Brian F.

Very well done. Thank you.

Max S.

Excellent program and presentation

Mark G.

One of the better CLE courses I have experienced. Very clear presentation of a complex area. Great job!

Eric H K.

Thank you for the presentation

Steven F.

Some of the material was difficult for a non-tax lawyer to follow, but with the transcript available as part of the materials, I will be able to go back over the speaker's explanation (together with my notes of what I think he said)

Joseph M.

Lecturer was very knowlegeable

Jonathan G.

Jason Navarino was an excellent presenter.

Larry S.

Excellent presentation.

Ayla E.

Great, knowledgeable teacher on a tough subject!

Joseph T.

This is a good, substantive discussion of LLC tax considerations. Well done.

Darryl S.

Very good presentation. It answered several questions that come up in discussions with clients about limited liability companies.

Jessica I.

very good course

David P.


Gregory W.

Best course and instructor so far. Very informative and great speaker.

David B.

The presenter was efficient and thorough. Great program

Alexander H.

Enjoyed it.

Georgian P.

Interesting topic. Enjoyed this course! Speaker was informative and effective in communicating the information. Very knowledgeable and professional in his presentation. Look forward to learning more on this topic with this speaker.

Randall S.


Nytasha T.

really well done, loved the examples! As a non-tax attorney this was the easiest to follow tax CLE.

Letcher E.

Great course! Would be in related content in another course.

Robert H.

Good discussion and relevant topics.

Robert W.


John K.

Excellent Presenter. Very clear and well done.

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