What is an investment partnership?

A partnership is classified as an investment partnership if at least 90 percent of its assets are investments in stocks, bonds, options, and similar intangible assets, and at least 90 percent of its income is derived from that kind of asset. For tax years ending on or after December 31, 2004, an investment partnership is not subject to replacement tax, and a nonresident partner is not subject to Illinois tax on the income passed through from the investment partnership, unless the partner's investment in the partnership was made in connection with a business the partner is conducting at least partially within Illinois. For prior years, an investment partnership and its partners are subject to the same rules as other partnerships and partners. See IITA Section 100.1501(a)(11.5) for more information.

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