1. Topics

S Corporation, Partnership & LLC Taxation

Advising S corporation clients on reasonable compensation

Advising owner-shareholders can prove invaluable in meeting guidelines for distinguishing compensation from distributions.

Corporate AMT proposed regulations issued; some penalties waived

The IRS issued proposed regulations providing guidance on the corporate alternative minimum tax (AMT) and a notice that waives the penalty for failure to pay estimated tax with respect to the corporate AMT for 2024.

Recent developments in states’ PTETs

This column offers updates and resources regarding the passthrough entity taxes that have been implemented in three dozen states.

Partnerships in distress: Raising capital and debt exchanges

Taxpayers should consider tax planning issues for partnerships and their partners when raising capital and exchanging debt for equity.

FinCEN uses TV ad to tell businesses about BOI

The PSA uses a chat between friends in a coffee shop to educate small businesses about beneficial ownership information reporting, which 32.6 million businesses must file.

BOI requirements roll along despite concerns about too little outreach

FinCEN, which oversees beneficial ownership information reports, has received just 2.7 million of the 32.6 million reports that it expects. Through June, FinCEN said, it has reached more than 90,000 stakeholders.

Foreign partnership reporting requirements

U.S. persons owning an interest in a foreign partnership may be required to file Form 8865, and the partnership may also face additional U.S. filings.

The past, present, and future of the BBA partnership audit regime

The Bipartisan Budget Act streamlined the partnership audit and adjustment processes, but uncertainties remain.

Partnership elected BBA procedures; TEFRA FPAA invalid

An early election into the partnership audit regime of the Bipartisan Budget Act was valid under the regulations, the Tax Court held.

Partnership distributions: Rules and exceptions

Although the general rules for how partners are taxed on distributions are relatively straightforward, many subtleties and exceptions can lead to missteps.

The double-tax consequences of an S corporation subject to BIG tax

A corporation’s built-in gains (BIG) tax cost of disposing of assets in liquidation within five years after its S election can be substantial.

FinCEN estimates millions of hours will be spent seeking BOI access

Almost 16,000 entities will spend over 8.7 million hours seeking access to beneficial ownership information in the first year, FinCEN estimated in a new notice.

Final regs. issued for 1% excise tax on corporate stock repurchases

The final regulations provide guidance regarding the reporting and payment of the excise tax on repurchases of corporate stock made after Dec. 31, 2022.

Recapture considerations for Inflation Reduction Act credits

The Inflation Reduction Act not only created $663 billion in new energy-related credits over 10 years, but it also expanded opportunities to monetize many of the energy tax credits through direct payment and transfer elections.

The BBA’s ‘ceases-to-exist’ rule in partnership termination transactions

Under the centralized partnership tax audit regime of the Bipartisan Budget Act of 2015, a buyer of a partnership interest can take certain steps to avoid a potential tax exposure related to uncertain tax positions for preacquisition tax years.

Partners’ basis on the liquidation of an insolvent partnership

When an insolvent partnership liquidates, determining the partners’ tax bases in the property they receive may be difficult due to the operation of Sec. 752(c).

Sec. 6603 deposits under the BBA audit regime

While the deposits can limit interest due on imputed underpayments under the centralized audit regime of the Bipartisan Budget Act of 2015, ambiguities remain, including for push-out elections.

Current developments in S corporations

This annual update covers recent developments relating to S corporations including IRS relief for common inadvertent S election lapses; state passthrough entity taxes; and other cases, rulings, and regulations.

Final regs. issued on conservation easement deduction disallowance

The IRS on Monday issued final regulations providing guidance on the new rule that disallows charitable contribution deductions for certain conservation easement contributions by partnerships and other passthrough entities.

Supreme Court issues narrow opinion upholding Sec. 965 transition tax

The Supreme Court upheld the mandatory repatriation tax as a valid exercise of Congress’s taxing authority. The Court did not reach the question of whether income must be realized to be taxable.
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