LLCs and LLPs

LLC Distributions of Contributed Property

An LLC member who makes a contribution to the LLC of property with an FMV different from its basis may be required to recognize gain or loss upon a subsequent distribution of the contributed property to another member.

Determining the LLC’s Required Year

An LLC taxed as a C corporation can choose any year end as the tax year end; if an LLC is classified as a partnership for federal income tax purposes, however, its tax year is governed by Sec. 706(b). 

When Is a U.S. LLC a Partnership for U.S. and U.K. Tax Purposes?

U.S. LLCs have become the preferred business entity in many situations because their members get both legal liability protection while being taxed in the United States as a partnership. This item examines how profits and losses of a U.S. LLC will be taxed on a U.K. resident’s U.K. tax return.

Separately Identifiable Intangible Assets: Tax Opportunities and Traps

Treating self-created customer-based intangibles as assets separate from goodwill can result in more favorable tax treatment for these intangibles. This article examines the rules regarding the separate treatment of self-created customer-based intangibles and the situations in which separate treatment may be beneficial.

Partners’ Limited Liability and Self-Employment Tax

The decision in Renkemeyer, Campbell & Weaver, LLP, signals that special allocations not supported by a written partnership agreement and without substantial economic effect will not withstand an IRS challenge and that classification of an interest in a partnership as a limited partner interest should not be predicated simply on a partner’s enjoyment of limited liability.

LLC Member Debt: Recourse or Nonrecourse?

How should deductions be allocated that are funded by a general obligation of an LLC if the obligation is guaranteed by or borrowed from a member and is recourse debt under Sec. 1001?

The Practitioner’s Role in Reviewing LLC Allocations

Sec. 704(a) provides that partnership allocations are determined in accordance with the partnership agreement, but an LLC classified as a partnership does not have a partnership agreement. This item discusses how such LLC allocations can be made.

IRS Issues Prop. Regs. on Series LLCs and Cell Companies

Proposed regulations would treat, for federal tax purposes, a series of a domestic series limited liability company (LLC), a cell of a domestic cell company, and a foreign series or cell that conducts an insurance business as an entity formed under local law, regardless of whether the entity is treated as a juridical person for local law purposes.

IRS Releases Prop. Regs. on Series LLCs

This item reviews proposed regulations the IRS released in September on the tax treatment of series limited liability companies and foreign cell companies, proposing to treat the individual series or cells as separate entities for tax purposes.

Newsletter Articles

TECHNOLOGY

2018 tax software survey

Among CPA tax preparers, tax return preparation software generates often extensive and ardent discussion. To get through the rigors of tax season, they depend on their tax preparation software. Here’s how they rate the leading professional products.

DEDUCTIONS

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.