Partner capital account reporting gets transition penalty relief
Errors by partnerships in reporting partners’ tax capital accounts under new rules for 2020 may be excused, the IRS outlined.
S Corporation, Partnership & LLC Taxation
Carried interests regulations are finalized
The IRS finalized proposed regulations on certain carried interests to account for changes made by the Tax Cuts and Jobs Act (TCJA). The TCJA extended from one year to three years the holding period for making carried interests eligible for capital gain treatment.
Draft instructions for reporting partnership capital accounts are issued
The IRS released draft instructions for Form 1065 to calculate partner capital accounts using the tax-basis method.
Proposed regs. on carried interests
This item discusses proposed regulations regarding the tax treatment of carried interests.
IRS finalizes rules on eligible terminated S corporations
The IRS issued final regulations on ETSCs and distributions of money from those corporations after the post-termination transition period.
Rules issued on transfers of partnership interests and effectively connected income
The IRS finalized proposed regulations on withholding from transfers of partnership interests to foreign persons and the definition of effectively connected income for those purposes.
The built-in gains tax
The built-in gains tax applies to C corporations that make an S corporation election, and it can be assessed during the five-year period starting with the first tax year for which the S election is effective.
Taxpayer not a shareholder of not-for-profit corporation
The president and a director of a not-for-profit is not its beneficial owner and cannot be a shareholder of it.
Centralized partnership audit regime changes proposed
The IRS issued rules on two special enforcement matters for purposes of the unified partnership audit rules.
Partnerships and S corps. can deduct state and local taxes
The IRS said it would issue proposed regulations allowing S corporations and partnerships to deduct “specified income tax payments” paid to state and local governments above the line and not as passthrough items for partners and shareholders.
IRS proposes rules on carried interests
The IRS issued proposed regulations under Sec. 1061, enacted by the TCJA, which requires owners of certain partnership interests to hold them for three years to be eligible for capital gain treatment.
Settlement offers for pending litigation of syndicated conservation easements
The IRS announced time-limited settlement offers, requiring tax benefit concessions and assessing penalties, to eligible taxpayers with pending cases.
Draft instructions for partnership capital account reporting released
The IRS released draft instructions for Form 1065, U.S. Return of Partnership Income, to calculate partner capital accounts using the tax-basis method.
Rules govern withholding on transfers of partnership interests and ECI
The IRS finalized proposed regulations on withholding from transfers of partnership interests to foreign persons and the definition of effectively connected income for those purposes.
Divorce settlement payments do not increase LLC basis
Payments to ex-wife and divorce lawyer do not increase taxpayer’s basis in an LLC.
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.
