Target Allocation and Other Tax Considerations in Drafting LLC Operating Agreements

Jason D. Navarino, Partner | Riker Danzig LLP

Jason D. Navarino is a Partner at Riker Danzig LLP and serves as Chair of the firm’s Tax and Corporate Groups. He advises both large and small business clients on structuring and documenting domestic and cross-border mergers, acquisitions, and joint ventures in a tax-efficient and tax-compliant manner and assists with forming operating and investment partnerships and limited liability companies, as well as wind-downs and dissolutions. His clients span numerous industries, including insurance companies and agencies, media enterprises, manufacturers, real estate developers, and entrepreneurs in the emerging blockchain and cannabis industries. He also counsels nonprofit and tax-exempt organizations on tax, corporate, employment, and intellectual property matters.

• Education & Credentials

Jason earned his undergraduate degree, summa cum laude, from the School of Public and International Affairs at Princeton University in 2004. He received his J.D. from Yale Law School in 2007, where he served as Senior Editor of the Yale Law Journal and as Director of the Community and Economic Development Clinic and its Small Business Legal Services program. He subsequently attained his LL.M. in Tax Law from New York University School of Law in 2013. He is admitted to practice law in New Jersey and New York, and before the United States District Court for the District of New Jersey.

• Recognition & Leadership

Jason has been included in The Best Lawyers in America® in the Corporate Law field for 2026 and has been recognized by Chambers USA: America’s Leading Lawyers for Business in Band One for Tax Law since 2022, with additional recognition for Corporate/M&A since 2023. He was named a 2025 “Leaders in Law” Award Honoree by NJBIZ and was previously named to the NJBIZ Forty Under 40 in 2016. In 2015, the New Jersey Law Journal recognized him as a “New Leader of the Bar,” and Thomson Reuters included him on its Super Lawyers “Rising Star” list from 2014 through 2022.

• Professional Involvement

Jason serves as Chair of the Business Taxation Committee of the Business Law Section of the New Jersey State Bar Association and as Chair of the International Taxation Committee of the Tax Law Section of the same organization, having previously served as Past Chair of the Tax Law Section. He was a former member of the New Jersey Supreme Court Ad Hoc Committee on Attorney Malpractice Insurance. He also serves as a member of the Board of Directors of the Microlumbia Impact Fund at Columbia Business School and as a member of the Legal, Wealth, and Tax Advisory Committee of the Community Foundation of New Jersey.

• Experience

Prior to joining Riker Danzig, Jason served as a Law Clerk to the Honorable Barry T. Albin of the Supreme Court of New Jersey and was an Associate at Debevoise & Plimpton, LLP. At Riker Danzig, he has built a practice centered on tax and corporate matters across a broad range of industries and has presented on topics including tax issues in mergers and acquisitions transactions and tax essentials for LLC operating agreements.

Len Nitti, CPA, MST Shareholder | Wilkin & Guttenplan, P.C.

Len Nitti is a Shareholder at Wilkin & Guttenplan, P.C., where he has been a member of the firm since 1999. Serving as Co-Practice Leader of the firm’s Real Estate Group, he advises a broad range of clients that includes closely held businesses, high-net-worth individuals, professional athletes, and real estate entities spanning affordable housing, qualified opportunity funds, green energy incentives, and urban real estate. His knowledge in federal and state taxation extends beyond compliance to encompass planning, research, and problem solving, with major areas of concentration in real estate, partnership, and state and local tax. He is also experienced in structuring complex transactions, coordinating voluntary disclosure agreements, developing exit strategies for real estate owners, and identifying tax savings opportunities and other financial incentives for clients.

• Education & Credentials

Len Nitti earned a Bachelor of Arts and a Master of Science in Taxation from Rutgers University. He holds a CPA license in New Jersey and continues his professional development through regular continuing professional education and educational seminars.

• Recognition & Leadership

Len serves as Vice President of the Monmouth-Ocean Development Council (MODC) and as Committee Chair for MODC’s Business Growth and Development Committee. He is also a member of the Supreme Court Committee on the Tax Court and serves on the Advisory Board of the Rutgers Center for Real Estate.

• Professional Involvement

Len is a member of the New Jersey Society of Certified Public Accountants (NJCPA) and its State Tax Resource Group, as well as the American Institute of Certified Public Accountants (AICPA). He additionally serves on the Advisory Committee of Middlesex County Vocational and Technical School.

• Experience

Len has been a frequent speaker on real estate, partnership, and state and local tax topics for CPAs, attorneys, and other professionals, presenting through both in-house sessions and seminars sponsored by external organizations. He has spoken extensively on qualified opportunity zone incentives and previously taught a seven-week course on Real Estate Accounting and Taxation at Monmouth University.

SESSION 1 – Entity Classification and Distribution Basics | 1:00pm – 1:20pm

This session covers entity classification, default rules and check-the-box elections, disregarded entities, and partnerships v. S corporations v. C corporations, then addresses distinguishing allocations and distributions, tax treatment of distributions, and drafting tax distributions.

SESSION 2 – Substantial Economic Effect Rules | 1:20pm – 1:40pm

Attorneys examine allocation methods, substantiality, capital account maintenance, achieving economic effect, and qualified income offsets under the substantial economic effect rules governing partnership allocations.

SESSION 3 – The Target Allocation Method | 1:40pm – 2:00pm

This session covers the explanation and examples of the target or forced allocation method, drafting options, addressing special allocations, deal terms, nonrecourse debt issues, and book v. tax allocations.

BREAK | 2:00pm – 2:10pm

SESSION 4 – Partner’s Interest, QBI Rules, and Transfers | 2:10pm – 2:40pm

Attorneys address partner’s interest in the partnership rules, qualified business income rules, drafting options for maximizing QBI deductions, and tax issues with respect to transfers including impact on allocations, sale v. retirement, PTP concerns, and basis adjustments.

SESSION 5 – Partnership Terminations and Other Tax Provisions | 2:40pm – 3:10pm

This session covers partnership terminations, withholding taxes, tax elections, tax reporting, partnership representative, profits interests explanation, comparison to capital interests, and drafting options.