1. Topics

S Corporation, Partnership & LLC Taxation

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.

Converting from S corp. to C corp.: Select issues for consideration

As a result of tax reform, which provides for a significant decrease in the corporate tax rate and a more modest decrease in passthrough tax rates, business owners may consider revoking S corporation elections.

Intercompany transactions do not increase debt basis in S corporation

Loans among related entities were not bona fide indebtedness that would give rise to debt basis in an S corporation for the shareholder.

Guidance addresses partnership accounting when IRS collects underpayments

A new technical question and answer from the AICPA provides nonauthoritative guidance to help financial statement preparers account for the amount a partnership pays the IRS under these circumstances.

Businesses affected by winter storms get extra time to file for extensions

The extension to March 20 applies to business taxpayers affected by the two recent winter storms, Quinn and Skylar, that primarily hit the Northeast and Mid-Atlantic United States.

Longer carried interest holding period includes S corporations

The IRS announced that the new three-year holding period for carried interests applies to S corporations as well as partnerships.

IRS issues final rules on election out of centralized partnership audits

IRS final regulations govern electing out of centralized partnership audits.

Partnership audit adjustments addressed in proposed regs.

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.

Providing services to a partnership in bankruptcy

Before a partnership files for bankruptcy, a financial professional should assess the nature of its debts.

Current developments in partners and partnerships

This article reviews and analyzes recent law changes as well as rulings and decisions involving partnerships.

IRS reallocates losses of joint venture among foreign and domestic partners

A CCA memorandum addressed the allocation of partnership losses where certain partners had negative capital account balances.

Dispute between shareholders did not strip taxpayers of beneficial rights of ownership

The Tax Court held that the taxpayers’ poor relations with other shareholders of an S corporation did not affect their ownership interest in the corporation.

Final rules govern election out of centralized partnership audits

The IRS finalized the rules for determining whether partnerships are eligible to elect out of the centralized audit procedures enacted in 2015, which apply to partnerships this year.

IRS holds investment transaction is sale of refined coal tax credits

Investors in a partnership were not entitled to deduct credits because the investment transaction was structured solely to facilitate the purchase of the credits.

Tax Court holds microcaptive insurance company was not a bona fide insurer

Tax Court held that amounts passthrough business entities paid to a purported insurance company they owned were not premiums paid for insurance contracts and not deductible.

Proposed regulations would allow Sec. 754 election without partner’s signature

To ease the regulatory burden on partnerships, the IRS announced that it is eliminating the requirement that partnership elections under Sec. 754 be signed by a partner.
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