1. Topics

S Corporation, Partnership & LLC Taxation

Final Regulations Clarify COD Rules for Grantor Trusts and Disregarded Entities

The IRS finalized regulations that 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.

Liquidation of an LLC

Rules regarding gain or loss on liquidation are a major reason for formation as an LLC rather than as a corporation.

Regulations Clarify: Partners Cannot Be Employees

The IRS issued temporary regulations clarifying that partners in a partnership that owns a disregarded entity cannot be treated as employees of the disregarded entity.

Ordinary Deduction for Worthless QSub Stock

Restructuring an existing QSub in an attempt to qualify for an ordinary deduction is prohibited and might result in an unfavorable deferral of loss.

Changes to the BIG Recognition Period of Sec. 1374(d)(7)

The potential effect of the built-in-gain tax is often a significant consideration during pending acquisitions involving an S corporation.

Rules for Partnership Allocations of Creditable Foreign Taxes Are Amended

Temporary regulations issued by the IRS amend an existing safe harbor that is used for determining whether allocations of CFTEs are deemed to be in accordance with the partners’ interests in the partnership.

Using the “Zero-Value” Approach for Carried Interests

There are risks are associated with valuing carried interest transfers.

Gifts of Partnership Interests

If the general partner has unfettered discretion to make or withhold distributions, any gift of an interest in the partnership may be treated as a gift of a future interest not qualifying for the annual gift tax exclusion.

Life Insurance and S Corporations: Unique Rules Present Opportunity and Peril

This column outlines the special considerations and issues related to life insurance policies for S Corporations.

IRS Asks for Comments Before Issuing Partnership Audit Rules

The IRS requested comments on several issues to assist it in issuing regulations to implement the new rules for partnership audits that were passed by Congress last year to replace the long-standing TEFRA audit regime.

Regulations Clarify Partnership Allocations of Creditable Foreign Taxes

New rules released by the IRS are intended to improve an existing safe harbor for allocating creditable foreign taxes so that they are deemed to be in accordance with the partners’ interests in the partnership.

Congress Changes Partnership Audit Procedures

The Bipartisan Budget Act of 2015 greatly strengthened the IRS’s ability to examine certain partnerships.

Taxation of Worthless and Abandoned Partnership Interests

This article discusses the tax treatment of worthless or abandoned stock and partnership interests.

Current Developments in Partners and Partnerships

This article discusses developments in income allocations, disguised sales, partnership distributions, terminations, and basis adjustments.

2015 Budget Act Makes Big Changes to Partnership Audit Procedures

The act replaces the current TEFRA partnership audit rules and repeals the current special rules for electing large partnerships.

Regulations Forthcoming on Partnership Nonrecognition of Property Contributions

The regulations would create an exception to the general nonrecognition rule for property contributions to a partnership in exchange for a partnership interest.

An Alternate Route to an IPO: Up-C Partnership Tax Considerations (Part 2)

This second article in a two-part series explores common tax considerations preceding and following an IPO employing an Up-C structure.

Calculating Basis in Debt

Direct shareholder loans to an S corporation can be very important tools for tax planning.

An Alternate Route to an IPO: The Up-C Partnership Structure (Part 1)

This first article in a two-part series covers the Up-C’s basic structure and how it is implemented.

Chief Counsel Advice Tackles Sec. 752’s Impact on Partnership COD Income

IRS Chief Counsel Advice interpreted whether Sec. 752 should be used to determine whether a partnership’s debt is recourse or nonrecourse for purposes of COD income rules.
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