1. Topics

S Corporation, Partnership & LLC Taxation

Final regs. address qualifying income exception for certain publicly traded partnerships

This item explains how the final regulations differ from the proposed regulations.

Recent regs. significantly change taxation of certain partnership contributions

Treasury and the IRS issued regulations that generally override nonrecognition treatment for certain contributions of property to partnerships.

The trust fund recovery penalty and LLCs

A responsible person may be subject to the TFRP if it can be shown he or she willfully failed to pay the trust fund taxes due.

Election to group activities for purposes of passive activity loss rules

The Tax Court held that a taxpayer had not elected to group two activities together under the passive activity loss rules simply by treating both activities as nonpassive.

Sec. 743(b) adjustment complications in multitier partnerships

Sec. 743(b) adjustments are complex, and multitier partnership structures only exacerbate that complexity.

Losses disallowed where S corp. not indebted to shareholder

The Tax Court held that an S corporation shareholder could not claim losses from several wholly owned S corporations due to insufficient basis.

Tax Court upholds non-safe-harbor reverse like-kind exchange

The Tax Court’s decision in Estate of Bartell alleviates uncertainty about structuring a reverse like-kind exchange intended to qualify for nonrecognition treatment.

S corporation owner-employees: Who controls income?

Clients who wish to have income from services be treated as income of their corporations should have revise independent contractor agreements so that payments are made to their corporations.

Ordinary loss deductions under Sec. 165(g)(3) in the S corp. context

This item discusses whether S corporations should be entitled to an ordinary loss under Sec. 165(g)(3) as a matter of law.

Disposing of passive activities

Disposing of property related to a passive activity does not resolve all matters related to the property.

State Challenges With the New Federal Partnership Audit Rules

The AICPA Task Force is developing a position paper with possible approaches that state CPA societies may want to consider in working with state legislatures and tax authorities in developing compliance policies.

Failure to Use S Corporation Correctly Results in Self-Employment Tax

Income earned by financial adviser was his, not the income of his wholly owned S corporation, and was therefore subject to self-employment tax.

Planning for the Discontinuation of a Partnership’s Business

This column focuses on what happens when a partnership’s business activities cease.

Current Developments in Partners and Partnerships

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

Centralized Partnership Audit Rules Proposed

The IRS released a package of proposed provisions that will apply to the recently enacted centralized audit regime that generally assesses and collects tax at the partnership level.

Royalties on Pharmaceutical Technology Taxable as Ordinary Income, Tax Court Holds

Tax Court held that royalties received by an S corporation under a license agreement are taxable as ordinary income to the S corporation’s individual shareholder.

IRS Rules Govern Disguised Sales and Allocations of Partnership Liabilities

The regulations address disguised sales of property by or to a partnership and allocations of excess nonrecourse liabilities to partners.

Avoiding Conversion to the Accrual Accounting Method by Electing S Status

A corporation may have to use the accrual method if it is required to maintain inventory records.

Basis for “Bad Boys”

Including “bad boy” provisions in loan agreements is a common practice to protect the lender in the commercial real estate finance industry.

New Partnership Audit Procedures Will Have a Profound Impact

Changes in the the Bipartisan Budget Act of 2015 are a departure from how partnerships have been treated for federal income tax purposes.
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