Contributions, Distributions & Basis

Capital contribution of reduced basis S corporation debt

The passthrough of S corporation losses to the extent of the shareholder’s basis in his or her stock and debt can be beneficial, but the resulting reduced basis debt may lead to taxable income on repayment of the debt.

Using R&D credits to reduce payroll taxes: An overlooked opportunity for startups

This article discusses who qualifies to take the credit, how to make the election, the calculation and allocation of the credit, and how to report it.

Amended returns satisfy statement-of-inconsistency requirement

A taxpayer’s amended returns sufficiently apprised the IRS of inconsistencies between the amended returns and the returns filed by the bankruptcy trustee of his wholly owned S corporation.

Loan guarantee does not increase S corp. shareholder’s debt basis

This item discusses how a back-to-back loan is a viable option for shareholders who want to increase their debt basis in an S corporation.

Revisiting the application of Sec. 280G on partnerships and LLCs

Depending on how a taxpayer’s ownership is structured, the sale of a partnership interest can have a Sec. 280G impact on partners or members that are C corporations.

Withholding requirement on sale of partnership interest by foreign partners under the TCJA

This discussion gives a historical perspective of the treatment of the sale of a partnership interest and the changes enacted as part of the TCJA.

Lender Management LLC and its impact on investment partnerships

Lender Management contended that its activities met the test for an active trade or business under guidelines.

Disguised-sale partnership regs. withdrawn

The IRS announced that it was withdrawing temporary regulations on the treatment of partnership liabilities for disguised-sale purposes and proposing to reinstate the old rules.

3-year holding period applies to S corporations

The IRS announced that S corporations are subject to the new extended three-year holding period applicable to carried interests.

Sec. 336(e) elections for S corp. targets: Get a step-up without a letter ruling

Individuals, partnerships, or other noncorporate entities that could not benefit from a Sec. 338(h)(10) election may be able to qualify for a Sec. 336(e) election.

Understanding the new Sec. 199A business income deduction

The new deduction allows certain business owners to keep pace with the significant corporate tax cut provided by the Tax Cuts and Jobs Act.

The function of basis

A partner’s basis is key to determining the application of loss limitations and the recognition of gain or loss on partnership distributions and dispositions of partnership interests.

Reporting publicly traded partnership Sec. 751 ordinary income and other challenges

Publicly traded partnerships can present challenges for reporting.

Intercompany transactions do not increase debt basis in S corporation

Loans among related entities were not bona fide indebtedness that would give rise to debt basis in an S corporation for the shareholder.

Longer carried interest holding period includes S corporations

The IRS announced that the new three-year holding period for carried interests applies to S corporations as well as partnerships.

Providing services to a partnership in bankruptcy

Before a partnership files for bankruptcy, a financial professional should assess the nature of its debts.

Current developments in partners and partnerships

This article reviews and analyzes recent law changes as well as rulings and decisions involving partnerships.

IRS reallocates losses of joint venture among foreign and domestic partners

A CCA memorandum addressed the allocation of partnership losses where certain partners had negative capital account balances.

IRS holds investment transaction is sale of refined coal tax credits

Investors in a partnership were not entitled to deduct credits because the investment transaction was structured solely to facilitate the purchase of the credits.

Tax Court holds microcaptive insurance company was not a bona fide insurer

Tax Court held that amounts passthrough business entities paid to a purported insurance company they owned were not premiums paid for insurance contracts and not deductible.
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