how are limited partners taxed 
because limited partners are investors who do not take an active role in the business the irs does not consider any income they receive from the limited partnership as earned income instead it is viewed as passive income which is not subject to self employment taxes the bottom linea limited partner often called a silent partner is an investor unlike general partners in a limited partnership limited partners don t make business decisions because limited partners are not active in the business the irs doesn t view income from the partnership as earned income that means limited partners aren t subject to self employment taxes 