Partnership and LLC Taxation

Proposed rules govern carried interests

The IRS issued proposed regulations under Sec. 1061, enacted by the law known as the Tax Cuts and Jobs Act, which requires owners of certain partnership interests to hold them for three years to be eligible for capital gain treatment.

The CARES Act and opportunities to implement changes on previously filed returns

The following discussion mostly focuses on the ability of partnerships to file amended returns and the QIP technical correction under the guidance issued in Rev. Procs. 2020-23 and 2020-25, respectively.

Partnership allocations lacking substantial economic effect

If a partnership’s allocations are not respected, the IRS or the courts can reallocate items of income or loss and assess underpayment or accuracy-related penalties.

Partnership form being redesigned for 2021

The IRS proposes modifying the partnership form (Form 1065) to help standardize the format of international tax items.

Sec. 743(b) adjustments: Shortcuts and surprises

This discussion considers reasons the purchaser of a partnership may want to rethink the use of such shortcuts when estimating the federal income tax consequences associated with a Sec. 743(b) adjustment in an acquired partnership interest.

Tax savings opportunities from the CARES Act

This article summarizes business and individual tax provisions of the CARES Act, emergency legislation designed to speed relief to employers and individuals who are struggling due to the COVID- 19 pandemic.

Partnerships, a pandemic, and Rev. Proc. 2020-23

Partnerships must weigh the benefits of amending returns now that administrative hurdles have been removed.

LLC mergers

When advising on a merger of LLCs, tax advisers must consider the application of state merger law, the continuity of the merged entities, and whether the merger constitutes an assets-over or assets-up transaction.

Administrative adjustment requests under the BBA

This item briefly summarizes the BBA rules, discusses the requirements for filing an AAR under Sec. 6227, and addresses the effects of filing an AAR on certain types of partners.

State considerations when amending BBA partnership returns

This discussion provides a review of the federal filing requirements for amending partnership returns and focuses on three states that have taken varying approaches to address the corresponding state effects of the BBA.

Deduction limitations of Sec. 162(m) to compensation paid by partnerships in Up-C and UPREIT structures

Proposed regulations change the paradigm for the tax treatment of compensation paid by a partnership situated below a publicly held corporation in an Up-C or UPREIT structure.

Withholding and reporting of partnership distributions to non-US partners

The mechanics of the withholding regime seem straightforward, but they can be difficult for certain tiered partnership structures.

Partnerships can file amended returns to get CARES Act benefits

To allow those partnerships to take advantage of the beneficial tax provisions in the Coronavirus Aid, Relief, and Economic Security Act, the IRS is allowing partnerships to file amended returns for 2018 or 2019.

A guide to changing previously filed partnership returns

This article explains the procedures for making adjustments to previously filed partnership returns, a process that changed significantly with the creation of the centralized partnership audit regime.

Deduction for worthless partnership interest

A recent Tax Court case provides a road map for establishing the legal requirements needed to sustain a deduction for worthlessness, and reinforces the position that actual abandonment of a partnership interest is not required to claim a loss under Sec. 165(a).

Commercially reasonable expectation of payment under final Sec. 752 regulations

This item discusses final regulations providing guidance on when partnership liabilities are recognized as recourse under Sec. 752.

Bottom-dollar payment obligations

In highly leveraged partnerships, bottom-dollar payment obligations have been used by partners to increase their at-risk basis in a partnership to use loss allocations or to receive nontaxable cash distributions.

State entity-level income tax elections for passthrough entities after federal tax reform

Federal tax reform has caused additional states to consider passthrough-entity-level taxes.

Partnerships can file amended returns to get CARES Act benefits

To allow those partnerships to take advantage of the beneficial tax provisions in the Coronavirus Aid, Relief, and Economic Security Act, the IRS is allowing partnerships to file amended returns for 2018 or 2019.

General partner of private investment fund: In a trade or business?

This item discusses the authority to consider when determining whether the general partner of an investment fund is engaged in a Sec. 162 trade or business.
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