S Corporation, Partnership & LLC Taxation
Taxpayers should strongly consider these letter rulings when trying to determine whether they want to structure a borrowing with a regarded entity as the legal borrower or whether they prefer to have a DRE be the legal borrower of the debt.
A law change and some regulations take effect while an array of provisions expire.
To be deductible at the entity level, payments by passthrough entities of state and local taxes should be made in the tax year of the liability, but state-specific elections may complicate that timing, tax advocates advise.
To avoid the hobby
loss rules, with
their limitation on
deductible expenses,
an activity must be
engaged in for profit;
electing S status
can help a taxpayer
establish profit
motive.
Forgiveness amounts are excluded from gross income but included in gross receipts for purposes including determining “small business taxpayer” status under Sec. 448(c).
The IRS posted FAQs with sample worksheets and instructions for taxpayers to use when calculating and reporting certain net long-term capital gains from partnership interests held in connection with the performance of services that must be recharacterized as short-term capital gains.
Microcaptive insurance arrangements have been vigorously scrutinized recently by the IRS.
The IRS clarified the standards that an LLC must satisfy to obtain a determination letter that it is exempt from taxation under Sec. 501(c)(3).
This item focuses on the use of unvested capital
interests as compensation.
This item discusses Illinois Legislature's S.B. 2531, which includes a PTE tax that allows a workaround to the federal $10,000 limitation for state and local tax deductions.
Schedule K-2 will report the partnership/S corporation–level activity attached to a flowthrough return, while Schedule K-3 will be provided to each partner or shareholder and report its proportionate
amount for each item.
This item summarizes the traditional Up-C/TRA arrangement and addresses the impact of Sec. 280E on the Up-C/TRA structure.
A hedge fund manager may be required to maintain separate tracking of a single partnership interest into several buckets to avoid the negative tax consequences of the short-term capital gain treatment of assets held from one to three years under Sec. 1061 for certain partnerships on the economic return of their invested capital.
The issue of a stock sale versus an asset sale raises a number of significant issues to be considered by S shareholders.
The issue of whether a partnership continues or terminates for U.S. federal income tax purposes frequently arises in restructuring transactions.
It can be difficult to determine whether a partnership that retains de minimis assets or performs administrative functions during its winding-up period terminates, particularly if such activities cross tax years.
This update on recent developments in taxation relating to S corporations includes cases and rulings on eligible terminated S corporations, S corporation income and losses, the one-class-of-stock requirement, and other issues.
Passthrough owners must consider many risks and
uncertainties, in addition to political trends on Capitol Hill, before opting into a state-level regime designed to bypass the $10,000 SALT deduction cap created by the TCJA.
Economic benefits from a compensatory split-dollar
life insurance arrangement are not property distributions.
LLCs can help families achieve key business and
tax objectives, while also providing liability protection and concentrating management power in
the hands of less than all of the owners.
