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.
S Corporation, Partnership & LLC Taxation
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.
Economic benefits from a compensatory split-dollar life insurance arrangement are not property distributions.
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.
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.
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.
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.
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.
This article reviews and analyzes recent law changes as well as rulings and decisions involving partnerships.
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.
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.
The IRS finalized proposed regulations on certain carried interests to account for changes made by the TCJA.
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.
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.
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.
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.
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.
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.
Proposed regulations provide that the IRS may determine that the centralized partnership audit regime does not apply to adjustments to partnership-related items under certain conditions.
A donated conservation easement has top-of-market value.