1. Topics

S Corporation, Partnership & LLC Taxation

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.

Qualifying a Marital Deduction Trust as an Eligible S Shareholder

The marital deduction permits the estate of the spouse who dies first to claim an estate tax deduction for property passing to the surviving spouse if certain requirements are met.

F Reorg. of an S Corp. May Require a New EIN

Rev. Rul. 2008-18 posits two situations in which an S corporation becomes a QSub of a newly formed corporation that will qualify as an F reorganization. The ruling also provides new guidance on the proper employer identification number (EIN) to be used by the entities in each situation.

Flexibility in Retroactive Partnership Agreement Amendments

Timely modifications to a partnership agreement can allow partners to engage in a measure of self-help to change their economic and tax situations.

Compensation Issues for Self-Employed S Corp. Owners

This item discusses how reporting a higher wage can actually maximize long-term profits for the owner-employee of an S corporation.

IRS Offers Opportunity for 2% Shareholders of S Corp.

The IRS recently offered an opportunity for 2% shareholders of an S corporation to receive a deduction for health insurance premiums under Sec. 162(l).
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