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.
S Corporation, Partnership & LLC Taxation
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.
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.
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.
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.
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 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.
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.
When does the centralized partnership audit regime not apply to partnership-related items?
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.
Top-of-market valuation for conservation easement upheld
A donated conservation easement has top-of-market value.
Partner capital account reporting gets transition penalty relief
Errors by partnerships in reporting partners’ tax capital accounts under new rules for 2020 may be excused, the IRS outlined.
Carried interests regulations are finalized
The IRS finalized proposed regulations on certain carried interests to account for changes made by the Tax Cuts and Jobs Act (TCJA). The TCJA extended from one year to three years the holding period for making carried interests eligible for capital gain treatment.
Draft instructions for reporting partnership capital accounts are issued
The IRS released draft instructions for Form 1065 to calculate partner capital accounts using the tax-basis method.
Proposed regs. on carried interests
This item discusses proposed regulations regarding the tax treatment of carried interests.
IRS finalizes rules on eligible terminated S corporations
The IRS issued final regulations on ETSCs and distributions of money from those corporations after the post-termination transition period.
Rules issued on transfers of partnership interests and effectively connected income
The IRS finalized proposed regulations on withholding from transfers of partnership interests to foreign persons and the definition of effectively connected income for those purposes.
The built-in gains tax
The built-in gains tax applies to C corporations that make an S corporation election, and it can be assessed during the five-year period starting with the first tax year for which the S election is effective.
