1. Topics

S Corporation, Partnership & LLC Taxation

Partnership extraordinary-item treatment for accounting method adjustments

The regulations under Secs. 481(a) and 706 set forth rules governing a partnership’s treatment of accounting method changes and partner allocations but do not provide clear guidance on how income from an unfavorable Sec. 481(a) adjustment should be allocated among partners with varying interests during the four-year recognition period.

Current developments in S corporations

This annual update covers recent developments relating to S corporations, including new IRS relief for common inadvertent S election lapses; state passthrough entity taxes; and court holdings concerning S corporations’ constructive distributions and passive versus nonpassive activities.

Stock repurchase excise tax reporting and payment delayed by IRS

The IRS says covered corporations will not have to report or pay the new 1% stock repurchase excise tax until it issues forthcoming regulations.

Penalty for underpayment of estimated corporate AMT waived for 2023

The IRS waived the penalty for corporations that did not make estimated payments of corporate AMT for their 2023 tax year, saying the move is “in the interest of sound tax administration.”

Single-member LLCs

A single-member limited liability company can adopt a variety of tax classifications to fulfill desired business purposes, besides conferring limited liability protection on its owner.

Ninth Circuit again addresses return filing

Faxing a return copy to an IRS agent or mailing it to an IRS attorney is not ‘filing’ the return.

Transfers of PTP interests: Options for foreign intermediaries

This item summarizes the options available to foreign intermediaries for transfers of PTP interests under current guidance and comments on some practical benefits and burdens of each.

Impact of business interest expense limitation regs. on partner redemptions

This item analyses two related examples of partner redemptions — with and without Sec. 163(j) basis adjustments — to highlight and clarify both the existing and new issues.

Nonresident alien partner’s gain on inventory items sourced to US

Nonresident alien’s Sec. 751 gain on sale of partnership interest was sourced to United States.

PTE deduction: Timing issues for accrual-method taxpayers

taxpayers and practitioners face uncertainty regarding the timing of the deduction provided for in Notice 2020-75.

Navigating partnership continuations

This item discusses the rules and authorities related to partnership continuations and when they may apply.

Interaction of S shareholders’ loss limitations

Shareholder basis and other applicable loss limitations must be applied in a specified order, with differing rules.

Current developments in partners and partnerships

This article reviews and analyzes recent rulings and guidance involving partnerships. The discussion covers developments in the taxation of partnerships and partners, debt and income allocations, distributions, and basis adjustments.

Notice listing syndicated conservation easement transactions held invalid

Notice identifying syndicated conservation easement transactions as listed transactions is held invalid.

Dividing an LLC

The form of an LLC division determines the tax treatment of any resulting LLCs.

IRS provides guidance on perfecting S elections and QSub elections

The guidance focuses on nonidentical governing provisions; principal-purpose determinations regarding the one-class-of-stock requirement; disproportionate distributions; certain errors on forms; missing administrative or acceptance letters for an S or QSub election; and the requirement to file returns consistent with an S election.

The ‘one class of stock’ requirement: An interesting letter ruling

While it might stand to reason that if there is only one shareholder, then there can be only one class of stock, that is not necessarily what the Code and regulations provide.

FinCEN provides time estimates for compiling beneficial ownership details

FinCEN estimates that most companies will have a simple structure that will require 90 minutes per response, but complex entry filings will require much more time.

FinCEN proposes rules about access to beneficial ownership information

Proposed regulations under the Corporate Transparency Act address protocols for access to beneficial owner information by authorized recipients.

Prop. regs. to provide withholding relief on sales of foreign PTPs

The IRS announced that it will issue proposed regulations providing some relief to brokers that are required to withhold on the transfer of an interest in a publicly traded partnership (PTP) if the PTP is a foreign-traded entity.
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