Educators as well as practitioners can model the tax effects of choice of entity and possible scenarios of tax law change.
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TOPICS / PASSTHROUGHS
Partnership and LLC Taxation
LLC validly elected into BBA partnership examination regime
To make a valid election into the Bipartisan Budget Act’s audit procedures, the IRS could not require the taxpayer to establish, as opposed to represent, that it had sufficient assets to pay any imputed underpayment, the Tax Court held.
Distributions to LLC members that contributed appreciated property
The Sec. 737 rules can cause a member to recognize precontribution gain on contributed property where the value of property later distributed to that member exceeds their basis in the LLC.
State considerations for BBA exams and adjustments
States vary in their treatment of partnership adjustments made under the centralized partnership audit regime instituted by the Bipartisan Budget Act of 2015.
Recent developments in states’ PTETs
This column offers updates and resources regarding the passthrough entity taxes that have been implemented in three dozen states.
Partnerships in distress: Raising capital and debt exchanges
Taxpayers should consider tax planning issues for partnerships and their partners when raising capital and exchanging debt for equity.
Foreign partnership reporting requirements
U.S. persons owning an interest in a foreign partnership may be required to file Form 8865, and the partnership may also face additional U.S. filings.
The past, present, and future of the BBA partnership audit regime
The Bipartisan Budget Act streamlined the partnership audit and adjustment processes, but uncertainties remain.
Partnership elected BBA procedures; TEFRA FPAA invalid
An early election into the partnership audit regime of the Bipartisan Budget Act was valid under the regulations, the Tax Court held.
Partnership distributions: Rules and exceptions
Although the general rules for how partners are taxed on distributions are relatively straightforward, many subtleties and exceptions can lead to missteps.
Recapture considerations for Inflation Reduction Act credits
The Inflation Reduction Act not only created $663 billion in new energy-related credits over 10 years, but it also expanded opportunities to monetize many of the energy tax credits through direct payment and transfer elections.
The BBA’s ‘ceases-to-exist’ rule in partnership termination transactions
Under the centralized partnership tax audit regime of the Bipartisan Budget Act of 2015, a buyer of a partnership interest can take certain steps to avoid a potential tax exposure related to uncertain tax positions for preacquisition tax years.
Partners’ basis on the liquidation of an insolvent partnership
When an insolvent partnership liquidates, determining the partners’ tax bases in the property they receive may be difficult due to the operation of Sec. 752(c).
Sec. 6603 deposits under the BBA audit regime
While the deposits can limit interest due on imputed underpayments under the centralized audit regime of the Bipartisan Budget Act of 2015, ambiguities remain, including for push-out elections.
Final regs. issued on conservation easement deduction disallowance
The IRS on Monday issued final regulations providing guidance on the new rule that disallows charitable contribution deductions for certain conservation easement contributions by partnerships and other passthrough entities.
Supreme Court issues narrow opinion upholding Sec. 965 transition tax
The Supreme Court upheld the mandatory repatriation tax as a valid exercise of Congress’s taxing authority. The Court did not reach the question of whether income must be realized to be taxable.
IRS moves to end ‘shell game’ of basis-shifting transactions
The Service said it will release new proposed regulations and a revenue ruling to challenge the use of basis-shifting transactions used by complex partnerships in moves that could add over $50 billion to government coffers over 10 years.
Filing an administrative adjustment request under the BBA
Partnerships’ administrative adjustment requests filed under the Bipartisan Budget Act rules can affect partners in disparate ways, including where adjustments flow through a tiered structure.
Calculating an LLC member’s amount at risk
Understanding the amount and composition of an LLC member’s amount at risk is crucial to determining the Sec. 465 limitation on losses that may be claimed.
Making sense of nonrecourse deductions in partnership taxation
Allocations to a partner may follow the partnership agreement or, where they lack substantial economic effect, be in accordance with the partner’s interest in the partnership. Special considerations apply to the allocation of nonrecourse deductions, i.e., losses, deductions, or expenditures attributable to nonrecourse liabilities.
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