The IRS issued proposed regulations addressing how partnerships and their partners adjust tax attributes to take into account partnership adjustments under the new centralized partnership audit regime.
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TOPICS / PASSTHROUGHS
Partnership and LLC Taxation
Providing services to a partnership in bankruptcy
Before a partnership files for bankruptcy, a financial professional should assess the nature of its debts.
Current developments in partners and partnerships
This article reviews and analyzes recent law changes as
well as rulings and decisions involving partnerships.
IRS reallocates losses of joint venture among foreign and domestic partners
A CCA memorandum addressed the allocation of partnership losses where certain partners had negative capital account balances.
Final rules govern election out of centralized partnership audits
The IRS finalized the rules for determining whether partnerships are eligible to elect out of the centralized audit procedures enacted in 2015, which apply to partnerships this year.
IRS holds investment transaction is sale of refined coal tax credits
Investors in a partnership were not entitled to deduct credits because the investment transaction was structured solely to facilitate the purchase of the credits.
Tax Court holds microcaptive insurance company was not a bona fide insurer
Tax Court held that amounts passthrough business entities paid to a purported insurance company they
owned were not premiums paid for insurance contracts and not deductible.
Proposed regulations would allow Sec. 754 election without partner’s signature
To ease the regulatory burden on partnerships, the IRS announced that it is eliminating the requirement that partnership elections under Sec. 754 be signed by a partner.
Developing a uniform state approach to the new federal partnership audit regime
This column, the first of two parts, discusses issues states must consider and steps some have taken to align partnership audit rules with new federal rules.
Tax Court denies ordinary abandonment losses in taxpayers’ disposition of partnership interests
Tax Court affirmed the IRS’s decision to recharacterize loss of a partnership disposition from ordinary to capital when the taxpayers failed to provide evidence of abandonment.
Charitable contribution substantiation procedures in statute not available in absence of regulations
A taxpayer’s substantiation requirements for a charitable contribution deduction were not met by information reported on the donee organization’s tax return.
IRS permits partnership basis election without partner’s signature
To ease the regulatory burden on partnerships, the IRS announced that it is eliminating the requirement that partnership elections under Sec. 754 be signed by a partner.
Dissolution of an LLC
Procedures for concluding the affairs of the LLC should be included in the operating agreement.
Practitioner’s incorrect change to passive status costly
A preparer’s improper change of status of income from active to passive is costly for taxpayers.
IRS reissues centralized partnership audit rules
The IRS reissued proposed regulations governing the centralized audit rules, which assess and collect tax at the partnership level.
Partner’s bonus was not a partnership distribution
A bonus payment to a hedge fund manager was payment for services outside her capacity as a partner.
How the death of a partner could affect a partnership’s year end
Partnerships must reevaluate their current fiscal year when a partner dies, since the estate may have a different year end than the individual partner.
New Sec. 987 regulations affect partnerships
The 2016 regulations put partners on notice that Sec. 987 principles generally apply to partnership assets and liabilities.
Penalties for inconsistent reporting subject to deficiency procedures
Where there are no adjustments to partnership items, a taxpayer could not hide behind the Sec. 6230(a)(2)(A)(i) exclusion.
Temporary disguised-sale regulations raise concerns
Should the IRS consider recognizing a contributing
partner’s economic risk of loss when the regulations are finalized?
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
