Japan denied a Japanese investor in a US limited partnership passthrough of losses from the partnership. It said the partnership is a corporation for tax purposes in Japan.
A president of a Tokyo Stock Exchange-listed company invested millions of dollars in a Delaware limited partnership that bought about 800 rental apartments in Texas, Arizona and Florida. The president claimed losses from the partnership; depreciation on the properties exceeded the rental income. The regional tax bureau denied the losses. In March, the National Tax Tribunal denied his appeal. The tribunal said that the losses belonged to the partnership and not the partners. US limited partnerships and limited liability companies are not treated as transparent for tax purposes as in the United States, but rather as separate entities.