1. Topics

S Corporation, Partnership & LLC Taxation

Using a Limited Liability Partnership as the Entity of Choice

A new type of entity that has appeared in the United States in recent years is the limited liability partnership (LLP) or registered limited liability partnership (RLLP). This entity is similar in many respects to the limited liability company (LLC). All states now have LLP statutes.

Current Developments in Partners and Partnerships

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

Final Sec. 1367 Regs. Address Open Account Debt Between S Corps. and Their Shareholders

Final regulations (T.D. 9428) amend the definition of open account debt, which may significantly affect when an S corporation shareholder recognizes gain on the repayment of such debt.

Temp. Regs. Allow Deemed Election to Expense Startup, Organizational Costs

Effective July 8, 2008, the IRS issued new temporary regulations to amend the rules under Secs. 195, 248, and 709 regarding elections to deduct startup expenditures and organizational expenditures of corporations and partnerships (T.D. 9411).

Like-Kind Exchanges of Partnership Properties

A partnership can distribute real property to its partners so that the partners can exchange the property in a Sec. 1031 like-kind exchange; if the exchange is properly structured, some of the partners can trade their interests in the property distributed in Sec. 1031 exchanges and some of the partners can sell their interests in the property in taxable transactions.

Partner Allowed to Make Different Elections for Different Partnership Interests

The Tax Court held that taxpayers owning multiple interests in the same partnership were entitled to make different elections under Sec. 6223 for each interest.

Allocating Passthrough Items to S Corporation Shareholders

Passthrough items from an S corporation are allocated on a per-share, per-day basis (Sec. 1377(a)(1)).

Guidance on S Corporation Life Insurance Premiums Raises Questions

The IRS recently issued long-awaited guidance on the treatment of life insurance premiums paid and life insurance proceeds received by an S corporation.

Current Developments in S Corporations (Part II)

This article discusses S corporation eligibility, elections, and termination issues, including guidance for changes made by the American Jobs Creation Act of 2004 and the Gulf Opportunity Zone Act of 2005 , significant issues related to second class of stock, and a notice that provides a simplified method to make an S election.

Termination of a Partnership Interest

This item explores the two main methods used when terminating a partnership interest: purchase and liquidation.

Treatment of Investment Interest Expense Allocable to Partnerships Trading Activity

IRS rulings confirm the proper tax treatment of investment interest expense allocable to a partnership’s trading activity

S Corporation Sale of Assets Followed by a Liquidation

This item focuses on the specific tax implications to the seller of the sale of an S corporation’s assets followed by a liquidation or a deemed asset sale followed by a liquidation.

Current Developments in S Corporations (Part I)

This two-part article discusses recent legislation, cases, rulings, regulations, and other developments in the S corporation area. Part I covers operational issues, including new guidance on the treatment of medical insurance premiums for wholly owned S corporations, new built-in gain developments, and the impact of charitable giving by S corporations on shareholders’ adjusted basis in stock.

S Corporation Shareholder Loans: A Cautionary Tale

A practitioner should take special care in advising clients on shareholder loans to an S corporation. Repayment of the loans by the corporation has the potential to generate unexpected taxable income to the shareholder.

IRS Flexes Its Muscles Under the Partnership Anti-Abuse Rules

Co-Editors: Steven F. Holub, CPA; Jane T. Rubin, CPA Prior to 1997, taxpayers had to navigate a complex set of rules to determine whether their association was one that would be taxed as a corporation or one that would be taxed as a partnership. In many situations the entity of

Treatment of Loans to U.S. Partners Under the U.S.-Germany Tax Treaty

Germany’s federal tax court ruled that interest payments received by a U.S.-resident partner on a loan to his German partnership can be taxed only in the United States in accordance with Article 11(1) of the U.S.-Germany income tax treaty and are exempt from German taxation.

A Practical Guide to the Tax Issues of Investing in Master Limited Partnerships

The tax reporting related to publicly traded partnerships has become an increasingly significant issue facing the tax practitioner community.

Tax Treatment of Government Grants to Partnerships Becomes Less Clear

Federal, state, and local governments have been providing tax incentives to businesses for many years. Along with the long history of government incentives to taxpayers, there is a long history of controversy over the tax treatment of these incentives.

IRS Issues New Rules on Allocation of Partnership Items

Proposed regulations under Sec. 704(c) provide that the Sec. 704(c) anti-abuse rule takes into account the tax liabilities of both the partners in a partnership and certain direct and indirect owners of such partners.

Transfers of Partnership Interests Are Not Indirect Gifts of Stock Held by Partnership

The Tax Court held that a transfer of interests in a family limited partnership that held only stock in one corporation was a transfer of the partnership interests, not an indirect transfer of stock held by the partnership.
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