Partnership continuity in restructuring transactions
The issue of whether a partnership continues or terminates for U.S. federal income tax purposes frequently arises in restructuring transactions.
S Corporation, Partnership & LLC Taxation
When does a partnership terminate under Sec. 708?
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.
Current developments in S corporations
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.
Where individual, corporate, and passthrough entity taxation meet
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.
Compensatory split-dollar life insurance benefits are compensation
Economic benefits from a compensatory split-dollar life insurance arrangement are not property distributions.
Using a family LLC for estate planning
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.
The partner-to-partner attribution trap and the anti-churning rules
Taxpayers dealing with tax basis step-up transactions involving related parties or rollover equity interests should consider the application of the anti-churning rules to avoid unforeseen results.
Final rules for interest expense deductions affecting hedge funds
The final regulations provide relief to hedge funds and their passive investors, although the regulations may increase the administrative burden and reporting requirements on hedge fund managers.
Handling tax issues related to noncompete agreements
Covenants not to compete can protect a company’s interest as long as they are drafted in an appropriate manner, but their 15-year amortization period can cause issues.
Sec. 1446(f) regulations: The rules and unanswered questions
This article addresses certain aspects of the withholding rules of the final Sec. 1446(f) regulations, options to eliminate or reduce Sec. 1446(f) withholding, and some outstanding issues.
Current developments in partners and partnerships
This article reviews and analyzes recent law changes as well as rulings and decisions involving partnerships.
Avoiding gain at the S shareholder level when a loan is repaid
When the basis in an S shareholder’s loan to the S corporation has been reduced by passthrough losses, repayment of the loan may be a taxable event.
Debt workouts involving commercial real estate
As short-term agreements that borrowers and creditors reached at the beginning of the pandemic start to expire, real estate companies and others will need to find long-term solutions to their insolvency problem.
Partnership interests, Sec. 465 at-risk limit, and Form 6198
This article focuses on the Sec. 465 at-risk limitation, one of the rules that could disallow all or part of a partner’s deduction of an allocable loss from a partnership.
IRS issues final rules on the treatment of carried interests
The IRS finalized proposed regulations on certain carried interests to account for changes made by the TCJA.
AICPA asks for guidance on S corp. and partnership PPP loan forgiveness
In a letter dated March 15, the AICPA asked for IRS guidance on how S corporations and partnerships should treat tax-exempt income from PPP loan forgiveness, especially when it occurs during a different tax period.
Bridging the gap: GILTI and AAA
IRS Notice 2020-69 provided a new entity election that allows an S corporation to compute the deemed inclusions at the entity level, as opposed to at the shareholder level. This item provides background on the new election, illustrates its effects, and highlights opportunities and traps to consider when contemplating the election.
IRS memorandum illustrates application of Sec. 704(c) anti-abuse rule
In FAA 20204201F, the IRS concluded that the Sec. 704(c) allocation method adopted by a partnership between a U.S. corporation and its domestic and foreign affiliates was unreasonable under the Sec. 704(c) anti-abuse rule.
Ensuring that allocations of LLC tax items are respected
If LLC members’ tax allocations are not made in accordance with the members’ interests in the LLC, they must fit into the substantial-economic-effect safe harbor.
IRS releases new draft form to request revocation of Sec. 754 election
The form has been developed due to an increase in Sec. 754 election revocation applications since the technical termination of a partnership under former Sec. 708(b)(1) (B) was repealed under the TCJA.
