This article summarizes business and individual tax provisions of the CARES Act, emergency legislation designed to speed relief to employers and individuals who are struggling due to the COVID-
19 pandemic.
Advertisement
TOPICS / PASSTHROUGHS
Partnership and LLC Taxation
Partnerships, a pandemic, and Rev. Proc. 2020-23
Partnerships must weigh the benefits of amending returns now that administrative hurdles have been
removed.
LLC mergers
When advising on a merger of LLCs, tax advisers
must consider the application of state merger law, the continuity of the merged entities, and whether the merger constitutes an assets-over or assets-up
transaction.
Administrative adjustment requests under the BBA
This item briefly summarizes the BBA rules, discusses the requirements for filing an AAR under Sec. 6227, and addresses the effects of filing an AAR on certain types of partners.
State considerations when amending BBA partnership returns
This discussion provides a review of the federal filing requirements for amending partnership returns and focuses on three states that have taken varying approaches to address the corresponding state effects of the BBA.
Deduction limitations of Sec. 162(m) to compensation paid by partnerships in Up-C and UPREIT structures
Proposed regulations change the paradigm for the tax treatment of compensation paid by a partnership situated below a publicly held corporation in an Up-C or UPREIT structure.
Withholding and reporting of partnership distributions to non-US partners
The mechanics of the withholding regime seem straightforward, but they can be difficult for certain
tiered partnership structures.
Partnerships can file amended returns to get CARES Act benefits
To allow those partnerships to take advantage of the beneficial tax provisions in the Coronavirus Aid, Relief, and Economic Security Act, the IRS is allowing partnerships to file amended returns for 2018 or 2019.
A guide to changing previously filed partnership returns
This article explains the procedures for making adjustments to previously filed partnership returns, a process that changed significantly with the creation of the centralized partnership audit regime.
Deduction for worthless partnership interest
A recent Tax Court case provides a road map for establishing the legal requirements needed to sustain a deduction for worthlessness, and reinforces the position that actual abandonment of a partnership interest is not required to claim a loss under Sec. 165(a).
Commercially reasonable expectation of payment under final Sec. 752 regulations
This item discusses final regulations providing guidance on when partnership liabilities are recognized as recourse under Sec. 752.
Bottom-dollar payment obligations
In highly leveraged partnerships, bottom-dollar payment obligations have been used by partners to increase their at-risk basis in a partnership to use loss allocations or to receive nontaxable cash distributions.
State entity-level income tax elections for passthrough entities after federal tax reform
Federal tax reform has caused additional states to consider passthrough-entity-level taxes.
Partnerships can file amended returns to get CARES Act benefits
To allow those partnerships to take advantage of the beneficial tax provisions in the Coronavirus Aid, Relief, and Economic Security Act, the IRS is allowing partnerships to file amended returns for 2018 or 2019.
General partner of private investment fund: In a trade or business?
This item discusses the authority to consider when determining whether the general partner of an investment fund is engaged in a Sec. 162 trade or business.
Electing S status by an LLC
A limited liability company can elect to be classified as a corporation and elect S status by following the procedures discussed here.
Optimal choice of entity for the QBI deduction
The enactment of the Sec. 199A QBI deduction adds a new consideration to the form of entity analysis because the QBI deduction available to a business owner may vary depending on a business’s entity form. This article discusses the differences in calculating the QBI deduction for S corporations and LLCs in a variety of scenarios.
Centralized partnership audit regime: Appeals procedures
The IRS published two memoranda that clarify how it will implement the BBA procedures, including appeal rights.
Why states should adopt the MTC model for federal partnership audits
To promote nationwide consistency, the AICPA encourages states’ adoption of the MTC model statute that conforms to the new federal partnership audit regime.
Current developments in partners and partnerships
This article discusses developments in the taxation of partnerships and partners, debt and income allocations, distributions, and basis adjustments.
PRACTICE MANAGEMENT
2026 tax software survey
CPAs rate their return preparation software’s performance during this year’s tax season.
