TEFRA

Complying with new schedules K-2 and K-3

What partnerships, S corporations, and others with foreign partnership interests need to know for tax year 2021 and beyond.

IRS rules on cancellation of debt of a disregarded entity

Taxpayers should strongly consider these letter rulings when trying to determine whether they want to structure a borrowing with a regarded entity as the legal borrower or whether they prefer to have a DRE be the legal borrower of the debt.

Reporting aspects of Sec. 743(b) adjustments

Partnerships and their partners need to work closely to maintain strong communications to overcome challenges to information sharing and, ultimately, to computational matters and information reporting.

Further guidance issued on tax treatment of PPP loan forgiveness

Forgiveness amounts are excluded from gross income but included in gross receipts for purposes including determining “small business taxpayer” status under Sec. 448(c).

Carried interest reporting FAQs and guidance posted

The IRS posted FAQs with sample worksheets and instructions for taxpayers to use when calculating and reporting certain net long-term capital gains from partnership interests held in connection with the performance of services that must be recharacterized as short-term capital gains.

Guidance issued for LLCs seeking tax-exempt recognition

The IRS clarified the standards that an LLC must satisfy to obtain a determination letter that it is exempt from taxation under Sec. 501(c)(3).

Navigating the new Schedules K-2 and K-3

Schedule K-2 will report the partnership/S corporation–level activity attached to a flowthrough return, while Schedule K-3 will be provided to each partner or shareholder and report its proportionate amount for each item.

The Sec. 1061 capital interest exception and its impact on hedge funds

A hedge fund manager may be required to maintain separate tracking of a single partnership interest into several buckets to avoid the negative tax consequences of the short-term capital gain treatment of assets held from one to three years under Sec. 1061 for certain partnerships on the economic return of their invested capital.

Sec. 1446(f) regulations: The rules and unanswered questions

This article addresses certain aspects of the withholding rules of the final Sec. 1446(f) regulations, options to eliminate or reduce Sec. 1446(f) withholding, and some outstanding issues.

Current developments in partners and partnerships

This article reviews and analyzes recent law changes as well as rulings and decisions involving partnerships.

Partner capital account reporting gets transition penalty relief

Errors by partnerships in reporting partners’ tax capital accounts under new rules for 2020 may be excused, the IRS outlined.

Draft instructions for reporting partnership capital accounts are issued

The IRS released draft instructions for Form 1065 to calculate partner capital accounts using the tax-basis method.

Draft instructions for partnership capital account reporting released

The IRS released draft instructions for Form 1065, U.S. Return of Partnership Income, to calculate partner capital accounts using the tax-basis method.

Current developments in partners and partnerships

This article discusses developments in the taxation of partnerships and partners, debt and income allocations, distributions, and basis adjustments.

Risks and opportunities for third-party partnership representatives

The BBA rules that allow a third party to act on behalf of the partnership, as well as the change in IRS adjustments being assessed at the partnership level, bring significant new challenges for tax practitioners.

IRS permits certain partnerships to file superseding partnership returns

The IRS is permitting certain partnerships that timely filed their tax returns for the 2018 tax year an extension of time to file superseding returns and Schedules K-1 for their partners.

BBA audit regime affects buyers and sellers of partnership interests

This item provides a brief overview of the BBA audit regime and discusses some of the practical considerations that partners may want to keep in mind when buying or selling partnership interests.

IRS finalizes centralized partnership audit rules

The IRS issued final regulations on the centralized partnership audit regime, which generally assesses tax at the partnership level.

IRS finalizes centralized partnership audit regulations

The IRS issued final regulations on the centralized partnership audit regime, which generally assesses tax at the partnership level.

Current developments in partners and partnerships

This article reviews and analyzes recent rulings and decisions involving partnerships and discusses developments in partnership formation, debt and income allocations, distributions, and basis adjustments.
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