The IRS delays e-filing capability for schedules reporting S shareholders’ items of international tax relevance, earlier forecast for mid-June, to July 24.
S Corporation, Partnership & LLC Taxation
In eight new FAQs on its website, the IRS covers some special issues, including several that it says will be added to the forms’ instructions.
AAA and AE&P calculations are key to determining stock basis and, thus, the taxability of shareholder distributions.
S corporation stock was not subject to a substantial risk of forfeiture because the stock forfeiture provision was unlikely to be enforced.
The Treasury Inspector General for Tax Administration recommends setting goals and benchmarks for the centralized audit regime under the Bipartisan Budget Act.
The IRS, citing earlier problems e-filing a new form reporting S corporation owners’ basis, has granted relief to certain farmers and fishermen who missed their March 1 filing deadline.
Comment letters from the AICPA and state CPA societies also offer further recommendations.
The new schedules for returns of passthrough entities with international items have been greeted with antipathy by practitioners. The IRS provided relief Wednesday for eligible entities for tax year 2021.
What partnerships, S corporations, and others with foreign partnership interests need to know for tax year 2021 and beyond.
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.