The regulations would create an exception to the general nonrecognition rule for property contributions to a partnership in exchange for a partnership interest.
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TOPICS / PASSTHROUGHS
Contributions, Distributions & Basis
Chief Counsel Advice Tackles Sec. 752’s Impact on Partnership COD Income
IRS Chief Counsel Advice interpreted whether Sec. 752 should be used to determine whether a
partnership’s debt is recourse or nonrecourse
for purposes of COD income rules.
Identifying a Partnership Distribution
A partnership distribution may consist of cash, property, or both. In addition, any reduction of a partner’s share of partnership liabilities is treated as an actual distribution of cash.
Notice Contains Rules on Gain Recognition for Property Transferred to Foreign Partnerships
The IRS intends to issue regulations under Sec. 721(c) to ensure that a U.S. person recognizes gain either immediately or periodically when it transfers certain property to a partnership that has foreign partners related to the transferor.
The Tax Adviser 2014 Best Article Award
James M. Greenwell received the award for his article on Sec. 704(c) Allocations.
Making a Valid Sec. 754 Election Following a Transfer of a Partnership Interest
It is not uncommon for a partnership to attempt to make a valid Sec. 754 election, only to find that it failed to satisfy regulatory requirements.
Identifying What Constitutes Partnership Liabilities and How They Affect the Basis of Partnership Assets
Only partnership debt that has an impact on the partnership’s inside basis is a liability. All other debt is excluded from consideration.
Proposed Regulations Would Require Gain or Loss Recognition on Certain Installment Obligation Transfers
The IRS issued proposed regulations that would require transferors that transfer installment obligations for equity interests in corporations or partnerships in nonrecognition transactions in satisfaction of those obligations to recognize gain or loss.
Transfers of Installment Obligations Would Trigger Gain or Loss Under Proposed Rules
The IRS issued proposed regulations relating to the nonrecognition of gain or loss on certain dispositions of an installment obligation.
Navigating the Net Investment Income Tax: Key Issues for Investment Funds and Their Partners
This item summarizes the aspects of the net investment income tax that are most relevant to hedge fund investors and general partners.
The Limited Liability Company Basis Limitation
Under Sec. 704(d), a member’s allocable share of loss from a limited liability company (LLC) taxed as a partnership is deductible only to the extent of the member’s outside basis in his or her LLC interest at the end of the LLC year. In determining a member’s outside basis at year end, adjustments for increases and decreases are made in a specific order according to Regs. Sec. 1.704-1(d)(2).
Computing the Domestic Production Activities Deduction for Passthrough Entities
Some unique issues can arise when computing the domestic production activities deduction for a passthrough entity.
Final Rules Issued on Bona Fide Indebtedness and Terminating Partnership’s Startup Expenses
Final regulations were issued on S corporation shareholder basis of indebtedness of the S corporation to the shareholder only if the indebtedness is bona fide and on the deductibility of startup expenditures and organizational expenses for partnerships following a termination of a partnership.
Current Developments in Partners and Partnerships
This article reviews and analyzes recent rulings and decisions involving partnerships. The discussion covers developments in partnership formation, income allocations, and basis adjustments
Partnership Basis Rules Proposed
The IRS issued proposed regulations providing guidance on the application of Sec. 704(c)(1)(C) added by the American Jobs Creation Act and the amendments to the mandatory basis adjustment rules of Sec. 743 in the AJCA.
Proposed Rules Would Require Terminating Partnerships to Amortize Startup Expenditures
The IRS issued proposed regulations aimed at preventing partnerships from using technical terminations to accelerate their deductions of startup and organizational expenses.
Sec. 754 and Ground Leases
A partnership making an optional Sec. 754 basis adjustment for land subject to a long-term ground lease is permitted to adjust the basis of the land but may not allocate the basis adjustment to buildings or other depreciable assets the lessee constructed.
Debt and Proving Basis in Flowthrough Entities
A taxpayer’s basis is often scrutinized by the IRS, particularly when basis is claimed based upon debts incurred by a flowthrough entity.
Defining “Attributable to” Under Sec. 897(g)
The lack of regulatory and published guidance has created uncertainty in applying Sec. 897 to determine the amount of gain attributable to a USRPI.
Incorporating an Insolvent Partnership: Availability of the Insolvency Exclusion
Incurring COD income at the partnership level may provide significantly different, and potentially detrimental, tax results to owners in a partnership than would incurring COD income at the corporate level.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
