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.
LLCs and LLPs
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.
This column reviews the determination of when an event triggers the termination of an LLC classified as a partnership
The IRS released proposed regulations on the tax treatment of series LLCs and cell companies, proposing to treat the individual series or cells as separate entities for tax purposes.
In recent decisions, courts have held that interests in an LLC that elects to be treated as a partnership for federal income tax purposes should not be treated as limited partnership interests per se.
This item examines the Canadian Tax Court’s opinion in TD Securities (USA) LLC as well as how it will affect the amendments under the Fifth Protocol to the Canada-U.S. treaty.
A company that is considering converting a corporate subsidiary to an LLC should determine whether the EIN will be reassigned to the LLC before filing any state conversion document.
For purposes of self-employment taxes, many members of LLCs have treated themselves as limited partners and have therefore reported that their distributive share of income was not subject to self-employment tax under Sec. 1402(a)(13). If recent Sec. 469 court cases were to be applied beyond Sec. 469, this self-employment tax position might be more difficult to sustain.
Converting a C corporation into a limited liability company (LLC) allows the C corporation shareholders to continue to have limited liability while acquiring the advantages of passthrough taxation, but the heavy tax cost of the conversion normally will be prohibitive.
There has been relatively little guidance on how LLCs should be treated for transfer tax purposes. However, in 2009 a case the Tax Court ruled in favor of the taxpayer that a transfer of an interest in an SMLLC should be valued as a transfer of an interest in the entity.
Little guidance is currently available on the treatment of series LLCs. Significant uncertainties about series LLCs include whether other states will recognize them for liability purposes, how they will be treated in bankruptcy, and how they will be treated for federal and state tax purposes.
The IRS has ruled that an individual’s sale of a limited liability company (LLC) interest, treated as a sale of an undivided interest in the underlying real property owned by the LLC, is subject to neither the Sec. 453(e) related-party rules nor the Sec. 453(g) installment method disallowance rule.
The Tax Court ruled that the check-the-box (CTB) regulations do not apply for purposes of valuing the transfer of property held through a single-member limited liability company (LLC) for federal gift tax purposes.
The focus of recent cases has been on application of the “limited partner” rule of Sec. 469(h)(2) and, based on the specific language contained in Temp. Regs. Sec. 1.469-5T, whether an interest in an LLC should be treated as an “interest in a limited partnership as a limited partner.”
Sec. 469(h)(2) treats a limited partner’s losses from an interest in a limited partnership as presumptively passive. The IRS has taken the position that a taxpayer who is a member of an LLC or LLP that is taxed as a partnership should be treated as a limited partner and therefore any losses passed through to the member are passive activity losses.
The Tax Court held that limited liability company (LLC) interests transferred by a taxpayer into trusts set up for the benefit of her children should be valued as transfers of LLC interests and not as transfers of the underlying assets owned by the LLC.
In the Garnett case, the Tax Court set precedent for the reporting of losses from LLPs and LLCs by limited liability partners who materially participate in the operations of the businesses in which they are investors.
The tax treatment of a contribution to a limited liability company (LLC) depends on whether the LLC is taxed as a partnership, a disregarded entity, or a corporation.
Effective January 1, 2010, Canada will look through tax-transparent U.S. LLCs and determine treaty eligibility at the member level.
The Tax Court held that the taxpayers’ interests in their LLPs and LLCs were not presumptively passive because they did not hold their interests in the entities as limited partners in a limited partnership.