Current developments in partners and partnerships
The discussion covers developments in the determination of partners and partnerships, gain on disposal of partnership interests, partnership audits, and basis adjustments.
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The discussion covers developments in the determination of partners and partnerships, gain on disposal of partnership interests, partnership audits, and basis adjustments.
Partnerships and their partners need to work closely to maintain strong communications to overcome challenges to information sharing and, ultimately, to computational matters and information reporting.
stock and debt basis under Sec. 1366(d)(1). Failing to properly track basis may require a recomputation of the shareholder’s basis.
When an LLC interest is transferred, the transferee’s basis depends on the transferor’s basis and numerous other potential factors.
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.
DEDUCTIONS
Business meal deductions after the TCJA
This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction.
TAX RELIEF
Quirks spurred by COVID-19 tax relief
This article discusses some procedural and administrative quirks that have emerged with the new tax legislative, regulatory, and procedural guidance related to COVID-19.