1. Topics

S Corporation, Partnership & LLC Taxation

Trade guaranteed payments for net profits to gain from QBI deduction

Partnerships making guaranteed payments may want to consider restructuring them as priority profit allocations.

Liquidating an S corporation that is not subject to the BIG tax

Review how shareholders would be taxed on the gain from the sale of stock in an S corporation that is not affected by the built-in gains tax.

Professional sports franchise did not receive income from ‘membership’ fees

The IRS agreed with the team’s position that the amounts received for the memberships do not constitute income because the team is obligated to repay the money to the “members.”

With partnership debt, son does not have to step into father’s shoes

A taxpayer, who received interests in four partnerships from his father by gift or bequest, did not step into his father’s shoes with respect to interest on certain partnership loans,

Payment of S corp.’s expenses by affiliated companies did not increase shareholder’s basis

A tax court recently found that where an S corp. and affiliated entities were partially owned by a taxpayer, payment of the S corp.’s expenses by the affiliated entities did not increase the taxpayer’s debt basis in the S corporation.

New rule on nonresident aliens in an S corporation

The TCJA provides a way to avoid the unexpected termination of the S election when certain ESBT situations occur.

Partnership terminations triggered by a change in form

Consider the scenarios that could cause a partnership to terminate so appropriate steps can be taken to properly account for the business’s status change.

New withholding regime on transfers of partnership interests

This discussion focuses on the withholding regime under the proposed regulations applicable to non-publicly traded partnerships and highlights a number of compliance and practical implications.

Phantom equity vs. profit interests: Strategic considerations

A practitioner who is a true trusted business adviser should consider what the business owner wants to achieve when making this decision.

Sec. 1446(f) proposed regs.: Withholding on transfers of partnership interests

Partnerships will need to establish procedures to deal with secondary withholding in the event that transferees do not withhold or collect the appropriate documentation.

Risks and opportunities for third-party partnership representatives

The BBA rules that allow a third party to act on behalf of the partnership, as well as the change in IRS adjustments being assessed at the partnership level, bring significant new challenges for tax practitioners.

Sec. 199A dividends paid by a RIC with interest in REITs and PTPs

The proposed regulations provided much-anticipated rules for RICs with REIT income for purposes of Sec. 199A.

Deducting losses after an S corporation terminates

A special relief provision allows unused losses caused by a lack of basis to be deducted by an S corporation shareholder under certain conditions for one year (or more) during the S corporation’s post-termination transition period.

Impact of S corp. shareholder agreements in M&A transactions

Shareholders and their advisers should be prepared to verify the validity of the S election when the decision is made to begin marketing the company for sale.

IRS permits certain partnerships to file superseding partnership returns

The IRS is permitting certain partnerships that timely filed their tax returns for the 2018 tax year an extension of time to file superseding returns and Schedules K-1 for their partners.

BBA audit regime affects buyers and sellers of partnership interests

This item provides a brief overview of the BBA audit regime and discusses some of the practical considerations that partners may want to keep in mind when buying or selling partnership interests.

IRS proposes regs. on withholding on transfers of partnership interests

The IRS issued proposed regulations on the operation of new Sec. 1446(f), which requires withholding on the transfer of a partnership interest described in Sec. 864(c)(8) (gain or loss of foreign persons from the sale or exchange of certain partnership interests).

Distribution by former S corporation is part dividend

The IRS ruled that a distribution to the sole shareholder of a C corporation was partly a recovery of the former S corporation’s accumulated adjustments account (AAA) and a taxable dividend for the remaining distribution.

Proposed rules would govern withholding on transfers of partnership interests

The IRS issued proposed regulations on the operation of new Sec. 1446(f), which requires withholding on the transfer of a partnership interest described in Sec. 864(c)(8) (gain or loss of foreign persons from the sale or exchange of certain partnership interests).

IRS finalizes centralized partnership audit rules

The IRS issued final regulations on the centralized partnership audit regime, which generally assesses tax at the partnership level.
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