1. Topics

S Corporation, Partnership & LLC Taxation

Electing S status by an LLC

A limited liability company can elect to be classified as a corporation and elect S status by following the procedures discussed here.

Optimal choice of entity for the QBI deduction

The enactment of the Sec. 199A QBI deduction adds a new consideration to the form of entity analysis because the QBI deduction available to a business owner may vary depending on a business’s entity form. This article discusses the differences in calculating the QBI deduction for S corporations and LLCs in a variety of scenarios.

Centralized partnership audit regime: Appeals procedures

The IRS published two memoranda that clarify how it will implement the BBA procedures, including appeal rights.

Why states should adopt the MTC model for federal partnership audits

To promote nationwide consistency, the AICPA encourages states’ adoption of the MTC model statute that conforms to the new federal partnership audit regime.

Accounting treatment for partnership syndication costs

This item discusses the tax basis and partnership capital accounting impacts of partner-incurred syndication costs.

Using a buy/sell agreement to establish the value of a business interest

Buy/sell agreements allow LLC members to control the transfer of ownership upon the occurrence of certain triggering events, but they must be carefully structured.

Current developments in partners and partnerships

This article discusses developments in the taxation of partnerships and partners, debt and income allocations, distributions, and basis adjustments.

Push-out elections and administrative adjustment requests

The IRS recently released new draft forms for partnerships under the centralized partnership audit regime enacted by the Bipartisan Budget Act.

Partnership capital reporting requirements postponed until 2020

The IRS is postponing the requirement to report partners’ shares of partnership capital on the tax-basis method for 2019 (for partnership tax years beginning in calendar 2019) until 2020 (for partnership tax years that begin on or after Jan. 1, 2020).

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.
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