1. Topics

S Corporation, Partnership & LLC Taxation

The S Corporation Built-In Gains Tax: Commonly Encountered Issues

This article examines five issues corporations commonly encounter in complying with the built-in gains tax.

Eighth Circuit Affirms S Corporation Shareholder’s Compensation Was Not Reasonable

The Eighth Circuit affirmed a lower court’s decision that an S corporation shareholder’s $24,000 salary was not reasonable compensation.

Partnerships Can Issue Schedules K-1 Electronically

The IRS issued rules partnerships must follow if they want to supply Schedules K-1 electronically.

Current Developments in Partners and Partnerships

This article reviews and analyzes recent rulings and decisions involving partnerships.

Invalid Sec. 754 Elections: Some Observations

This item discusses the requirements for a valid Sec. 754 election and then highlights some of the reasons for those late or missed elections.

IRS Issues Regs. on Interest Expense Allocation and Apportionment for Partners

The IRS has issued temporary and proposed regulations that make four changes to the rules for allocating and apportioning interest expense for partners in partnerships.

Regs. Issued on Transfers of Partnership Interest to Satisfy Partnership Debt

The IRS issued final regulations on the application of Sec. 108(e)(8) to partners and partnerships.

Excise and Employment Tax Treatment of Disregarded Entities Clarified

The IRS issued final regulations clarifying the treatment of disregarded entities with respect to employment and certain excise taxes.

Religious and Family Member FICA and FUTA Exceptions Extended to Disregarded Entities

The IRS issued temporary and proposed regulations that extend the religious and family member FICA and FUTA tax exceptions to disregarded entities.

Providing Fringe Benefits to S Corporation Employees

In an S corporation, employee fringe benefits paid on behalf of a 2% shareholder are subject to special rules.

Tax Issues and the 2010 S Corporation Shareholder Decedent

A tax practitioner working with the estate of an S corporation shareholder who died in 2010 must contend with numerous issues. This article points out some of the issues and discusses some of the choices that can be considered.

IRS Proposes New Treatment of LLC Members, Limited Partners Under Passive Loss Rules

The IRS issued proposed regulations that would redefine “interest in a limited partnership as a limited partner” for purposes of determining material participation under the Sec. 469 passive loss rules.

Final Regs Issued on Debt Satisfied by a Partnership Interest

The IRS issued final regulations on the application of Sec. 108(e)(8) to partners and partnerships.

Current Developments in S Corporations (Part II)

This article provides an annual update of recent IRS rulings, guidance, and other developments concerning S corporations. It discusses S corporation eligibility, elections, termination issues, second class of stock, and trusts owning S corporation stock.

Regs. Extend Religious and Family Member FICA, FUTA Exceptions to Disregarded Entities

Temporary and proposed regulations extend the religious and family member FICA and FUTA tax exceptions to disregarded entities.

Final Regs Clarify Excise, Employment Tax Treatment of Disregarded Entities

The IRS issued final regulations clarifying the treatment of disregarded entities with respect to employment and certain excise taxes.

IRS Proposes Eliminating De Minimis Partner Rule

The IRS issued proposed regulations on October 24 that, if finalized, would remove the de minimis partner rule in Regs. Sec. 1.704-1(b)(2)(iii)(e) (REG-109564-10).

The Targeted Allocations Approach: A Basic Primer

This item discusses a growing trend in the allocation provisions of partnership agreements in which limited partnerships have been adopting a targeted allocation approach through which “tax follows cash.”

QSSTs and ESBTs: No Longer Mutually Exclusive

Under Letter Ruling 201122003, if a current ESBT allows for separate and independent trust shares under the trust document, a trust may be treated as both an ESBT and a QSST. This ruling opens the door for additional planning for gifts of S corporation stock to younger generations.

Sec. 179D and Passthrough Entities

The Sec. 179D deduction available for building designers has unexpected consequences for design firms structured as passthrough entities.
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