1. Topics

S Corporation, Partnership & LLC Taxation

Sec. 541: A trap for the unwary investment partnership

The 20% personal holding company tax may unexpectedly apply to an investment partnership.

Sec. 987 final regulations: A practical approach for partnerships

Recent final regulations offer guidance as to what Treasury and the IRS may consider an eligible method for partnerships and Sec. 987 QBUs held by partnerships to determine Sec. 987 gain or loss.

How S elections go wrong and how to fix them

Problems with S elections frequently cause them to be invalid when made or to terminate. This article discusses four of the most common ones and three revenue procedures that may enable S corporations to fix them without obtaining a costly letter ruling.

Reconciliation bill clears committee on second try

Sunday revote came after Republican fiscal hawks initially joined Democrats to sink the bill, which includes tax provisions approved by the House Ways and Means Committee last week.

Ways and Means approves proposed TCJA extensions and tax changes

The bill would make key portions of the TCJA permanent and create a new “senior bonus” deduction, among its many provisions. An AICPA statement said it is “deeply troubled” by the plan to curtail use of passthroughs to avoid SALT cap. The bill now heads to the House Budget Committee.

Building not a certified historic structure

The Tax Court denied deduction of a qualified conservation contribution of a façade easement, noting the building lacked a required listing in the National Register of Historic Places.

Deemed liquidation on electing QSub status

An S corporation’s qualified Subchapter S subsidiary election for an existing corporation is a deemed tax-free liquidation under Secs. 332 and 337 if certain requirements are met.

The complex simplicity of partnership interests exchanged for services

Preventing unwanted tax consequences from compensatory partnership interests requires understanding Regs. Sec. 1.721-1(b)(2) and safe-harbor guidance under Rev. Procs. 93-27 and 2001-43.

How Trump’s opposition to global tax deal may affect businesses

The Trump administration has rejected the OECD’s initiative to reform the taxation of multinational enterprises. Learn more about the executive action in this Q&A with an international tax expert.

New IRS form for partners receiving property distributions

Form 7217, Partner’s Report of Property Distributed by a Partnership, debuted for 2024, intended to apprise the IRS of factors in a partner’s basis computation.

Mandatory basis adjustments for certain LLC transfers

The partnership-level adjustment may be required for a substantial built-in loss, except for electing investment partnerships and securitization partnerships.

Strategies for information return penalties and Form 945 assessments

Penalties for failure to file correct information returns and backup withholding can be waived, but timely and correct responses to IRS notices are essential.

Using the IRS’s BBA Online Form Submission Service

To request a modification to an imputed underpayment from a Bipartisan Budget Act audit or push out the underlying adjustment, audited partnerships must use the IRS’s web-based service.

Expenses that could have been substantiated not allowed

The Cohan rule for estimating business deductions did not apply where taxpayers could have substantiated them but failed to do so, the Tax Court held.

IRS grants partnerships additional time to furnish complete Forms 8308

The IRS is providing relief from penalties imposed solely for failure to furnish Part IV of Form 8308 for partnerships by Jan. 31, 2025, if a partnership meets certain requirements.

Regs. address partnership recourse liabilities, related-party rules

The IRS issued regulations that finalize proposed regulations issued in 2013. The guidance is focused on when and to what extent a partner is treated as bearing the economic risk of loss and the special rules applying to a partner related to another partner.

Surprisingly taxable partnership distributions

Because partnerships’ income is taxed to the separate partners as it is earned, eventual distributions generally are not taxable, but there are exceptions. This article discusses several of these exceptions in which distributions of money or property or a reduction in liabilities treated as a distribution may create taxable income for partners, sometimes in unanticipated ways.

Economic substance doctrine and related-party partnership transactions

To avoid potentially onerous penalties, taxpayers in controlled groups and their advisers must consider whether the economic substance doctrine will disallow the results of basis-shifting transactions involving a related-party partnership.

AICPA to Congress: Delay needed in BOI reporting deadline

Without a delay, “millions of small business owners become accidentally and unknowingly delinquent in their compliance,” reads the letter, signed by CEO Barry Melancon, CPA, CGMA.

CRFB leader: Tax policy may not be a Trump administration high priority

The head of the nonpartisan Committee for a Responsible Federal Budget told the AICPA & CIMA National Tax Conference that extending the Tax Cuts and Jobs Act would add $5 trillion to the national debt.
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