This article reviews and analyzes recent rulings and decisions involving partnerships and discusses developments in partnership formation, debt and income allocations, distributions, and basis adjustments.
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TOPICS / PASSTHROUGHS
Partnership and LLC Taxation
IRS takes narrow view of aggregation under the at-risk rules
The IRS concluded that a taxpayer was not permitted to aggregate the S corporations with the partnership for the purpose of applying the at-risk rules of Sec. 465.
Repeal of technical terminations: What will and will not be missed
With the repeal of technical terminations, partnerships can only terminate for U.S. federal income tax purposes if no part of any business, financial operation, or venture continues to be conducted by any of its partners.
Understanding the effect a partnership agreement has on allocations
If the partnership agreement’s tax allocations do not have substantial economic effect, or if the partnership agreement is silent concerning tax allocations, the tax allocation must be made in accordance with the partners’ interests in the partnership.
Issues and considerations in appointing a partnership representative
This item discusses issues partnerships and their advisers should consider when designating a PR or DI, accounting for the potential for conflicts of interest, whether and to what extent limitations can be placed on the PR or DI, and how these roles differ dramatically from that of the TMP.
Using R&D credits to reduce payroll taxes: An overlooked opportunity for startups
This article discusses who qualifies to take the credit, how to make the election, the calculation and allocation of the credit, and how to report it.
A uniform state approach to the new federal partnership audit regime
Broad state adoption of the model statute developed by the AICPA in partnership with other
major stakeholders will provide greater uniformity
and increased compliance.
Prop. regs. restore allocation of partnership liabilities in disguised sales
Disguised sale occurs when a partner(s) engages in a transaction that, when viewed together with a partnership, involve property and are characterized as the sale or exchange of property.
Lessee cannot take deduction for facade easement contribution
Because facade easements must be protected in perpetuity, a leaseholder was not allowed to claim a deduction for contributing an easement to a not-for-
profit preservation corporation.
Revisiting the application of Sec. 280G on partnerships and LLCs
Depending on how a taxpayer’s ownership is structured, the sale of a partnership interest can have a Sec. 280G impact on partners or members that are C corporations.
Rules determine who can be a partnership representative under new audit regime
The IRS finalized proposed regulations under Sec. 6223 on the procedures for designating a partnership representative and the authority of the partnership representative under the centralized partnership audit regime.
Filing ‘optional’ partnership return costly
Married couples in business together can elect qualified joint venture status to avoid partnership filing requirements.
Loans between members and LLCs
A loan from an LLC member to the LLC must be structured carefully to ensure it is respected as bona fide debt.
Potential pitfalls of state income tax incentives for passthroughs
The benefit of a state income tax credit, if it is earned in a state where the owner is not resident, is often lost.
IRS withdraws partnership regs. on disguised sales
The IRS announced that it was withdrawing temporary regulations on the treatment of partnership liabilities for disguised-sale purposes and proposing to reinstate the old rules.
Final regs. govern who can be a partnership representative
The IRS finalized proposed regulations under Sec. 6223 on the procedures for designating a partnership representative and the authority of the partnership representative under the centralized partnership audit regime.
AICPA recommends simplified adjustment procedure in centralized partnership audits
The IRS should provide a simplified adjustment procedure for partnership audits, the AICPA recommended in a letter to the IRS Chief Counsel’s Office.
Allocating debt when a disregarded entity is a partner
The net value rule determines the extent to which a
partner who owns a partnership interest through a disregarded entity bears the economic risk of loss
for a partnership recourse liability.
Withholding requirement on sale of partnership interest by foreign partners under the TCJA
This discussion gives a historical perspective of the treatment of the sale of a partnership interest and the changes enacted as part of the TCJA.
Lender Management LLC and its impact on investment partnerships
Lender Management contended that its activities met the test for an active trade or business under guidelines.
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