1. Topics

S Corporation, Partnership & LLC Taxation

IRS withdraws partnership regs. on disguised sales

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.

S corporation shareholder cannot take FICA tip credit

An S corporation shareholder cannot unilaterally change an S corporation’s tax election in order to claim FICA tip credits.

Final regs. govern who can be a partnership representative

The IRS finalized proposed regulations under Sec. 6223 on the procedures for designating a partnership representative and the authority of the partnership representative under the centralized partnership audit regime.

AICPA recommends simplified adjustment procedure in centralized partnership audits

The IRS should provide a simplified adjustment procedure for partnership audits, the AICPA recommended in a letter to the IRS Chief Counsel’s Office.

Allocating debt when a disregarded entity is a partner

The net value rule determines the extent to which a partner who owns a partnership interest through a disregarded entity bears the economic risk of loss for a partnership recourse liability.

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.

Another look at C corp. vs. S corp. in light of tax reform

In the typical closely held business context, the TCJA’s reduction of corporate tax rates to a flat 21% is far from a panacea.

A trap for the unwary: Sec. 743 in tiered partnerships

A taxpayer who pays the full FMV for a partnership interest that has forward Sec. 704(c) property associated with it and who subsequently contributes it to another partnership may not receive the expected tax deductions.

IRS issues final regs. on electing out of centralized partnership audit regime

The regulations’ definition of an ‘eligible partner’ is key to determining whether a partnership can elect out of the centralized partnership audit regime.

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 withdrawn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.

AICPA issues TQA on accounting for payments under the centralized partnership audit regime

The technical question and answer helps financial statement preparers account for the amount a partnership pays the IRS for previous underpayments of tax, interest, and penalties.

Appropriations act tax provisions include IRS funding and audit rules

The $1.3 trillion spending bill passed by Congress includes IRS funding and tax-related technical corrections, including changes to the centralized partnership audit regime.

AICPA recommends flexibility in partnership audits

The IRS should provide a simplified adjustment procedure for partnership audits, the AICPA recommended in a letter to the IRS Chief Counsel’s Office.

Proposed regs. would govern partnership audit adjustments

The IRS issued proposed regulations addressing how partnerships and their partners adjust tax attributes to take into account partnership adjustments under the new centralized partnership audit regime.

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.
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