At $3,000 and never adjusted for inflation during nearly a century, the Sec. 861(a)(3) de minimis exception seldom applies.
Advertisement
Topics
Partner Transactions
The complex simplicity of partnership interests exchanged for services
Preventing unwanted tax consequences from compensatory partnership interests requires understanding Regs. Sec. 1.721-1(b)(2) and safe-harbor guidance under Rev. Procs. 93-27 and 2001-43.
Regs. address partnership recourse liabilities, related-party rules
The IRS issued regulations that finalize proposed regulations issued in 2013. The guidance is focused on when and to what extent a partner is treated as bearing the economic risk of loss and the special rules applying to a partner related to another partner.
Economic substance doctrine and related-party partnership transactions
To avoid potentially onerous penalties, taxpayers in controlled groups and their advisers must consider whether the economic substance doctrine will disallow the results of basis-shifting transactions involving a related-party partnership.
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 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.
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.
Limited partners and self-employment tax: A new test
The Tax Court recently held in Soroban Capital Partners that to determine whether a limited partner’s partnership distributive share is excluded from self-employment tax under Sec. 1402(a)(13), an analysis of the partner’s actual functions and roles is required. This article discusses what that analysis should entail and offers tax planning tips.
A $10.7 million compensation deduction miss
The recent Hoops decision by the Seventh Circuit, affirming the Tax Court, highlights potential problems for accrual-basis employers of claiming a deduction of nondeferred compensation following mergers and acquisitions.
Current developments in partners and partnerships
This annual update reviews court rulings and guidance on issues including debt and income allocations, distributions, and basis adjustments.
Impact of business interest expense limitation regs. on partner redemptions
This item analyses two related examples of partner redemptions — with and without Sec. 163(j) basis adjustments — to highlight and clarify both the existing and new issues.
Nonresident alien partner’s gain on inventory items sourced to US
Nonresident alien’s Sec. 751 gain on sale of partnership interest was sourced to United States.
Real estate partnership restructuring and potential disguised sales
With certain restructuring transactions, careful consideration is needed to prevent the transaction from being deemed a disguised sale.
Regulations streamline partnership basis elections
Final regulations issued by the IRS and Treasury allow a Sec. 754 election statement to be submitted without a partner’s signature.
Payments to LLC members for services
When LLC members receive payments for services performed for the LLC, the tax treatment depends on whether the member is performing the services in the capacity as a member.
State tax considerations around the sale of a partnership interest
This item discusses how owners selling partnership interests should address which states may attempt to tax the entire gain, how taxation of the gain may be divided among the states where the partnership does business, compliance considerations, and technical developments and trends that may affect the transaction.
Deferred compensation not deductible in year basketball franchise sold
No deduction is allowed in the year of sale of a basketball team for deferred compensation owed to two of the team’s players.
What’s new for 2022 in federal taxes
A law change and some regulations take effect while an array of provisions expire.
Unvested partnership interests as compensation
This item focuses on the use of unvested capital
interests as compensation.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
