1. Topics

S Corporation, Partnership & LLC Taxation

Revenue Procedure Provides Liberal Relief for Late S Corp. Elections

The IRS provided a simplified method for taxpayers to apply for relief for various late S elections

Tiered Partnerships: Will Net Investment Income Tax and Proposals to Change Taxation of Carried Interests Wreak Havoc?

Tiered partnerships could become subject to ordinary income tax treatment on many forms of revenue that had previously enjoyed a lower capital gain tax rate.

2012 Best Article Award

Winners of The Tax Adviser’s 2012 Best Article Award.

Sale of Unrealized Receivables Not Eligible for Installment Method

The Tax Court held that the taxpayers could not report the portion of a sale of a partnership interest that was attributable to unrealized receivables using the installment method.

Understanding the Tax Consequences of S Corporation Redemptions to a Shareholder

While an analysis of the tax consequences of a redemption to the shareholder usually begins with whether the transaction qualifies for sale or exchange treatment, another starting point is whether the S corporation has accumulated earnings and profits.

QSub Status Is Not Property of Bankruptcy Estate

An S corporation’s revocation of its S corporation status, which caused its QSub subsidiary to lose its status as a QSub, was not a post-bankruptcy-petition transfer of property of the QSub’s bankruptcy estate.

QSub Election Does Not Increase Shareholder Stock Basis

The Tax Court held that shareholders of an S corporation improperly increased the adjusted basis of their S corporation stock when the S corporation made a QSub election for its wholly owned C corporation subsidiary.

Final Rules on Acceleration of COD Income Deferral Are Issued

The IRS issued final regulations on the rules to accelerate COD income that taxpayers elected to defer over a five-year period when an applicable debt instrument was reacquired by the issuer or a related party in 2009 or 2010.

Final Regulations for Noncompensatory Partnership Options

The IRS in issued final and proposed regulations governing the issuance, exercise, lapse of, and accounting for a noncompensatory partnership option.

Targeted Partnership Allocations: Part II

This article discusses a number of unresolved issues regarding targeted partnership allocations.

Application of Sec. 704(c) to Divisions

There is no guidance addressing how Sec. 704(c) principles should apply when a partnership distributes an asset to multiple partners in a partnership division, including in an assets-over division, which may leave open two alternative approaches.

Defining “Attributable to” Under Sec. 897(g)

The lack of regulatory and published guidance has created uncertainty in applying Sec. 897 to determine the amount of gain attributable to a USRPI.

LIFO Inventory Considerations When Making a C-to-S Conversion

A taxpayer valuing its inventory under the last-in, first-out (LIFO) method should consider two significant implications for taxable income when converting from a C corporation to an S corporation.

Entities With Less Than $50 Million in Assets Get New Schedule M-3 Filing Rules

The IRS announced changes in the filing requirements for Schedule M-3, Net Income (Loss) Reconciliation, for certain corporations and partnerships.

Targeted Partnership Allocations: Part I

This article discusses the rules governing safe-harbor allocations, the rules governing targeted allocations, and reasons for the use of targeted allocations.

Schedule M-3 Filing Requirement Reduced for Entities Below $50 Million in Assets

The IRS announced changes in the filing requirements for Schedule M-3, Net Income (Loss) Reconciliation, for certain corporations and partnerships.

Foreign Corporations Investing in Partnerships: Common Branch Profits Tax Issues

Highlights of the tax compliance challenges that often arise as a result of U.S. branch profits tax exposure.

Sec. 901(m): Potential Trap for Partnership Transactions

New Sec. 901(m) limits the creditability of foreign taxes in certain acquisition transactions where a taxpayer receives a basis step-up for U.S. tax purposes but no corresponding basis step-up for foreign tax purposes.

Incorporating an Insolvent Partnership: Availability of the Insolvency Exclusion

Incurring COD income at the partnership level may provide significantly different, and potentially detrimental, tax results to owners in a partnership than would incurring COD income at the corporate level.

Check-the-Box: A Trap for the Unwary

It has never been easier to effect the choice of operating as a sole proprietorship, partnership, or corporation for federal income tax purposes; however, sometimes unforeseen problems can result.
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