Divorce settlement payments do not increase LLC basis
Payments to ex-wife and divorce lawyer do not increase taxpayer’s basis in an LLC.
S Corporation, Partnership & LLC Taxation
Economic issues when forming an LLC
A number of issues must be considered when reviewing the organizational documents for a limited liability company, including member compensation, allocation of income and loss, and when distributions will be made.
Final regs. govern eligible terminated S corporation rules
The IRS finalized proposed regulations on eligible terminated S corporations, a new provision enacted under the Tax Cuts and Jobs Act that provided favorable treatment for corporations that wished to terminate their S elections.
Regulations coming on S corporations with accumulated E&P and GILTI
The IRS announced that it will issue regulations to allow S corporations with accumulated earnings and profits to elect to have global intangible low-taxed income inclusions increase the S corporation’s accumulated adjustments account.
Upcoming deadline to amend certain BBA partnership returns
While the ability to temporarily file amended returns is welcome by many BBA partnerships, some unanswered questions remain about the consequences of doing so, and in some circumstances filing an AAR could be preferable.
Private equity and F reorganizations involving S corporations
The M&A market is poised to regain its pre-COVID-19 activity levels as many business owners seek to exit closely held businesses or explore alternatives. One popular transaction that could emerge is Sec. 368(a)(1)(F) reorganizations F reorganizations) of S corporations.
Proposed rules govern carried interests
The IRS issued proposed regulations under Sec. 1061, enacted by the law known as the Tax Cuts and Jobs Act, which requires owners of certain partnership interests to hold them for three years to be eligible for capital gain treatment.
Making a new S election after termination
Generally, after a corporation has revoked or terminated an S election, it cannot make an S election for any tax year before its fifth tax year that begins after the first tax year for which the termination was effective, unless the IRS consents to the election.
State and local considerations in using an F reorganization to facilitate an acquisition
Foresight of the potential state tax implications of an F reorganization will allow a seller to evaluate the lesser-known hazards.
The CARES Act and opportunities to implement changes on previously filed returns
The following discussion mostly focuses on the ability of partnerships to file amended returns and the QIP technical correction under the guidance issued in Rev. Procs. 2020-23 and 2020-25, respectively.
Partnership allocations lacking substantial economic effect
If a partnership’s allocations are not respected, the IRS or the courts can reallocate items of income or loss and assess underpayment or accuracy-related penalties.
Partnership form being redesigned for 2021
The IRS proposes modifying the partnership form (Form 1065) to help standardize the format of international tax items.
Sec. 743(b) adjustments: Shortcuts and surprises
This discussion considers reasons the purchaser of a partnership may want to rethink the use of such shortcuts when estimating the federal income tax consequences associated with a Sec. 743(b) adjustment in an acquired partnership interest.
Partnerships, a pandemic, and Rev. Proc. 2020-23
Partnerships must weigh the benefits of amending returns now that administrative hurdles have been removed.
Tax savings opportunities from the CARES Act
This article summarizes business and individual tax provisions of the CARES Act, emergency legislation designed to speed relief to employers and individuals who are struggling due to the COVID- 19 pandemic.
Deduction limitations of Sec. 162(m) to compensation paid by partnerships in Up-C and UPREIT structures
Proposed regulations change the paradigm for the tax treatment of compensation paid by a partnership situated below a publicly held corporation in an Up-C or UPREIT structure.
Withholding and reporting of partnership distributions to non-US partners
The mechanics of the withholding regime seem straightforward, but they can be difficult for certain tiered partnership structures.
A guide to changing previously filed partnership returns
This article explains the procedures for making adjustments to previously filed partnership returns, a process that changed significantly with the creation of the centralized partnership audit regime.
State considerations when amending BBA partnership returns
This discussion provides a review of the federal filing requirements for amending partnership returns and focuses on three states that have taken varying approaches to address the corresponding state effects of the BBA.
LLC mergers
When advising on a merger of LLCs, tax advisers must consider the application of state merger law, the continuity of the merged entities, and whether the merger constitutes an assets-over or assets-up transaction.
