Partnership and LLC Taxation

Rules for Partnership Allocations of Creditable Foreign Taxes Are Amended

Temporary regulations issued by the IRS amend an existing safe harbor that is used for determining whether allocations of CFTEs are deemed to be in accordance with the partners’ interests in the partnership.

Using the “Zero-Value” Approach for Carried Interests

There are risks are associated with valuing carried interest transfers.

Gifts of Partnership Interests

If the general partner has unfettered discretion to make or withhold distributions, any gift of an interest in the partnership may be treated as a gift of a future interest not qualifying for the annual gift tax exclusion.

IRS Asks for Comments Before Issuing Partnership Audit Rules

The IRS requested comments on several issues to assist it in issuing regulations to implement the new rules for partnership audits that were passed by Congress last year to replace the long-standing TEFRA audit regime.

Regulations Clarify Partnership Allocations of Creditable Foreign Taxes

New rules released by the IRS are intended to improve an existing safe harbor for allocating creditable foreign taxes so that they are deemed to be in accordance with the partners’ interests in the partnership.

Congress Changes Partnership Audit Procedures

The Bipartisan Budget Act of 2015 greatly strengthened the IRS’s ability to examine certain partnerships.

Taxation of Worthless and Abandoned Partnership Interests

This article discusses the tax treatment of worthless or abandoned stock and partnership interests.

Current Developments in Partners and Partnerships

This article discusses developments in income allocations, disguised sales, partnership distributions, terminations, and basis adjustments.

2015 Budget Act Makes Big Changes to Partnership Audit Procedures

The act replaces the current TEFRA partnership audit rules and repeals the current special rules for electing large partnerships.

Regulations Forthcoming on Partnership Nonrecognition of Property Contributions

The regulations would create an exception to the general nonrecognition rule for property contributions to a partnership in exchange for a partnership interest.

An Alternate Route to an IPO: Up-C Partnership Tax Considerations (Part 2)

This second article in a two-part series explores common tax considerations preceding and following an IPO employing an Up-C structure.

An Alternate Route to an IPO: The Up-C Partnership Structure (Part 1)

This first article in a two-part series covers the Up-C’s basic structure and how it is implemented.

Chief Counsel Advice Tackles Sec. 752’s Impact on Partnership COD Income

IRS Chief Counsel Advice interpreted whether Sec. 752 should be used to determine whether a partnership’s debt is recourse or nonrecourse for purposes of COD income rules.

Congress Makes Changes to Partnership Audit and Adjustment Rules

The new rules would apply to partnership returns filed for tax years beginning after Dec. 31, 2017.

IRS Proposes Rules on Disguised Payments for Services

The IRS issued proposed regulations that require a nonexclusive six-factor test to determine whether payments from a partnership to a partner are disguised payments.

Identifying a Partnership Distribution

A partnership distribution may consist of cash, property, or both. In addition, any reduction of a partner’s share of partnership liabilities is treated as an actual distribution of cash.

Extension OK Where Individual Had Apparent Authority to Sign It

A consent to extend the limitation period for the assessment for partnership items signed by the tax matters partner of a partnership in his capacity as the tax matters partner of another partnership was valid because the individual had the apparent authority to sign the consent.

Notice Contains Rules on Gain Recognition for Property Transferred to Foreign Partnerships

The IRS intends to issue regulations under Sec. 721(c) to ensure that a U.S. person recognizes gain either immediately or periodically when it transfers certain property to a partnership that has foreign partners related to the transferor.

Accounting for the Death of a Partner

This column reviews the income tax rules that come into play upon a partner’s death.

Special Care Needed in Dealing With Statute-of-Limitation Issues for TEFRA Partnerships

Audits of flowthrough entities such as partnerships cause administrative complexity for the IRS and taxpayers because the audit sometimes drags on longer than the statute-of-limitation period for the IRS to make an adjustment.
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