This item discusses the requirements for a valid Sec. 754 election and then highlights some of the reasons for those late or missed elections.
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TOPICS / PASSTHROUGHS
Partnership and LLC Taxation
IRS Issues Regs. on Interest Expense Allocation and Apportionment for Partners
The IRS has issued temporary and proposed regulations that make four changes to the rules for allocating and apportioning interest expense for partners in partnerships.
Regs. Issued on Transfers of Partnership Interest to Satisfy Partnership Debt
The IRS issued final regulations on the application of Sec. 108(e)(8) to partners and partnerships.
Excise and Employment Tax Treatment of Disregarded Entities Clarified
The IRS issued final regulations clarifying the treatment of disregarded entities with respect to employment and certain excise taxes.
Religious and Family Member FICA and FUTA Exceptions Extended to Disregarded Entities
The IRS issued temporary and proposed regulations that extend the religious and family member FICA and FUTA tax exceptions to disregarded entities.
IRS Proposes New Treatment of LLC Members, Limited Partners Under Passive Loss Rules
The IRS issued proposed regulations that would redefine “interest in a limited partnership as a limited partner” for purposes of determining material participation under the Sec. 469 passive loss rules.
Final Regs Issued on Debt Satisfied by a Partnership Interest
The IRS issued final regulations on the application of Sec. 108(e)(8) to partners and partnerships.
Regs. Extend Religious and Family Member FICA, FUTA Exceptions to Disregarded Entities
Temporary and proposed regulations extend the religious and family member FICA and FUTA tax exceptions to disregarded entities.
Final Regs Clarify Excise, Employment Tax Treatment of Disregarded Entities
The IRS issued final regulations clarifying the treatment of disregarded entities with respect to employment and certain excise taxes.
IRS Proposes Eliminating De Minimis Partner Rule
The IRS issued proposed regulations on October 24 that, if finalized, would remove the de minimis partner rule in Regs. Sec. 1.704-1(b)(2)(iii)(e) (REG-109564-10).
The Targeted Allocations Approach: A Basic Primer
This item discusses a growing trend in the allocation provisions of partnership agreements in which limited partnerships have been adopting a targeted allocation approach through which “tax follows cash.”
Sec. 179D and Passthrough Entities
The Sec. 179D deduction available for building designers has unexpected consequences for design firms structured as passthrough entities.
Final Regs. Govern Election to Deduct Business Start-up Expenses
The IRS issued final regulations (T.D. 9542) governing elections by individual taxpayers, corporations, and partnerships to deduct start-up expenses or organizational expenditures.
Election to Deduct Business Startup Expenses Gets Final Rules
The IRS issued final regulations governing elections by individual taxpayers, corporations and partnerships to deduct startup expenses or organizational expenditures.
Separately Identifiable Intangible Assets: Tax Opportunities and Traps
Treating self-created customer-based intangibles as assets separate from goodwill can result in more favorable tax treatment for these intangibles. This article examines the rules regarding the separate treatment of self-created customer-based intangibles and the situations in which separate treatment may be beneficial.
Partnership Determination of Eligible Basis for Energy Grants
This item discusses whether a partnership should take a partner’s Sec. 743(b) adjustment into account in determining eligible basis of qualified energy property that the partnership has not yet placed in service.
Partners’ Limited Liability and Self-Employment Tax
The decision in Renkemeyer, Campbell & Weaver, LLP, signals that special allocations not supported by a written partnership agreement and without substantial economic effect will not withstand an IRS challenge and that classification of an interest in a partnership as a limited partner interest should not be predicated simply on a partner’s enjoyment of limited liability.
IRS Finalizes Automatic Five-Month Extension for Partnership, Trust and Estate Returns
Final regulations set the time for automatic extensions of partnership, trust and estate income tax returns at five months (T.D. 9531). Under this rule, the extended returns and Schedules K-1 for partners and beneficiaries will generally be due September 15.
Case Addresses the Sec. 752 Anti-Abuse Regs.
The recent decision of the Tax Court in Canal Corp. may provide some insight into when a partner’s potential obligation to pay partnership debts will be disregarded in determining liability allocations.
Discharge of Indebtedness Rules Clarified for Grantor Trusts and Disregarded Entities
The IRS issued proposed regulations that provide rules regarding who is the “taxpayer” for purposes of applying the Sec. 108 discharge of indebtedness rules to a grantor trust or disregarded entity.
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.
