Allocating debt when a disregarded entity is a partner
The net value rule determines the extent to which a partner who owns a partnership interest through a disregarded entity bears the economic risk of loss for a partnership recourse liability.
Passthroughs
Withholding requirement on sale of partnership interest by foreign partners under the TCJA
This discussion gives a historical perspective of the treatment of the sale of a partnership interest and the changes enacted as part of the TCJA.
Another look at C corp. vs. S corp. in light of tax reform
In the typical closely held business context, the TCJA’s reduction of corporate tax rates to a flat 21% is far from a panacea.
AICPA recommends simplified adjustment procedure in centralized partnership audits
The IRS should provide a simplified adjustment procedure for partnership audits, the AICPA recommended in a letter to the IRS Chief Counsel’s Office.
IRS issues final regs. on electing out of centralized partnership audit regime
The regulations’ definition of an ‘eligible partner’ is key to determining whether a partnership can elect out of the centralized partnership audit regime.
A trap for the unwary: Sec. 743 in tiered partnerships
A taxpayer who pays the full FMV for a partnership interest that has forward Sec. 704(c) property associated with it and who subsequently contributes it to another partnership may not receive the expected tax deductions.
Disguised-sale partnership regs. withdrawn
The IRS announced that it was withdrawing temporary regulations on the treatment of partnership liabilities for disguised-sale purposes and proposing to reinstate the old rules.
Allocating LLC recourse debts
Regulations remove basis benefit for an LLC member when circumstances indicate a plan to circumvent or avoid debt payment obligation.
Appropriations act tax provisions include IRS funding and audit rules
The $1.3 trillion spending bill passed by Congress includes IRS funding and tax-related technical corrections, including changes to the centralized partnership audit regime.
AICPA issues TQA on accounting for payments under the centralized partnership audit regime
The technical question and answer helps financial statement preparers account for the amount a partnership pays the IRS for previous underpayments of tax, interest, and penalties.
AICPA recommends flexibility in partnership audits
The IRS should provide a simplified adjustment procedure for partnership audits, the AICPA recommended in a letter to the IRS Chief Counsel’s Office.
Sec. 336(e) elections for S corp. targets: Get a step-up without a letter ruling
Individuals, partnerships, or other noncorporate entities that could not benefit from a Sec. 338(h)(10) election may be able to qualify for a Sec. 336(e) election.
3-year holding period applies to S corporations
The IRS announced that S corporations are subject to the new extended three-year holding period applicable to carried interests.
Proposed regs. would govern partnership audit adjustments
The IRS issued proposed regulations addressing how partnerships and their partners adjust tax attributes to take into account partnership adjustments under the new centralized partnership audit regime.
Understanding the new Sec. 199A business income deduction
The new deduction allows certain business owners to keep pace with the significant corporate tax cut provided by the Tax Cuts and Jobs Act.
Intercompany transactions do not increase debt basis in S corporation
Loans among related entities were not bona fide indebtedness that would give rise to debt basis in an S corporation for the shareholder.
The function of basis
A partner’s basis is key to determining the application of loss limitations and the recognition of gain or loss on partnership distributions and dispositions of partnership interests.
Reporting publicly traded partnership Sec. 751 ordinary income and other challenges
Publicly traded partnerships can present challenges for reporting.
Converting from S corp. to C corp.: Select issues for consideration
As a result of tax reform, which provides for a significant decrease in the corporate tax rate and a more modest decrease in passthrough tax rates, business owners may consider revoking S corporation elections.
Guidance addresses partnership accounting when IRS collects underpayments
A new technical question and answer from the AICPA provides nonauthoritative guidance to help financial statement preparers account for the amount a partnership pays the IRS under these circumstances.
