1. Topics

S Corporation, Partnership & LLC Taxation

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.

Disguised-Sale and Partnership Liability Allocation Rules Issued

The IRS issued three sets of regulations addressing issues of disguised sales of property by or to a partnership and allocations of excess nonrecourse liabilities to partners.

Advantages of an Optional Partnership Basis Adjustment

The optional basis adjustment election is an attempt to allow partners to correct certain discrepancies by affecting a transferee’s allocable basis in the underlying partnership assets.

IRS Provides Rules for Early Election of New Partnership Audit Procedures

The IRS issued rules regarding the time, manner, and form for partnerships to make the election to apply the recently enacted unified partnership audit rules for certain years before Jan. 1, 2018.

A Glimpse Into the New Partnership Audit Rules

The changes affect not only procedural rules and technicalities, but also the underlying economic valuation of partnership interests and legal rights of partners as well.

Asset Acquisition Target Ineligible for Success-Based Fee Safe Harbor

Recent Chief Counsel Advice provides helpful insight to taxpayers planning or negotiating merger and acquisition transactions.

Violating Certain “Bad Boy” Guarantees Can Trigger Recourse Liabilities

This item examines whether a bad-boy guarantee changes an otherwise nonrecourse liability to a recourse liability.

How the COD Rules Apply to Grantor Trusts and Disregarded Entities

New regulations provide rules for determining who is the “taxpayer” for purposes of applying the Sec. 108 discharge-of-indebtedness rules to a grantor trust or disregarded entity.

Top 10 Easy Ways That Trusts Cause Loss of S Corporation Status

This item presents 10 ways that S corporations can lose their S election status, most of them involving trusts.

Documenting Deductible Transaction Costs for Acquisitive Transactions

This item discusses the ability of a target in a Sec. 338(h)(10) transaction to use the safe-harbor election provided by Rev. Proc. 2011-29.

IRS Issues Temporary Regulations on Early Elections of New Partnership Audit Procedures

The IRS issued rules regarding the time, manner, and form for partnerships to make the election to apply the recently enacted unified partnership audit rules for certain years before Jan. 1, 2018.

Recognizing When a Disguised Sale of Property Takes Place

Property transfers between a partner and a partnership are considered to be a taxable sale of the property under certain circumstances.

Partnership Audit Rules for the Next Decade

This article analyzes new rules regarding the audit procedures for partnerships and describes important elections partnerships may make.

Time to Adjust: Adding to the List of Partnership Revaluation Events

The IRS should consider expanding the list of revaluation events to include additional transactions that change the underlying economics of the partners’ arrangement, if a reliable FMV for the revalued assets can be established.

Missing Partnership Merger Definition Raises Questions

Regulations governing the federal income tax consequences of a partnership merger lack clear guidance on when a transaction resulting in the combination of two partnerships into a single partnership constitutes a merger.

Temporary Regulations Prohibit Partners From Being Employees

The IRS issued temporary regulations intended to halt the practice of treating partners as employees of a disregarded entity in order to include them in employee benefit plans.
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