Planning for the Discontinuation of a Partnership’s Business
This column focuses on what happens when a partnership’s business activities cease.
Terminations
Current Developments in Partners and Partnerships
This article discusses developments in income allocations, disguised sales, partnership distributions, terminations, and basis adjustments.
Final Rules Issued on Bona Fide Indebtedness and Terminating Partnership’s Startup Expenses
Final regulations were issued on S corporation shareholder basis of indebtedness of the S corporation to the shareholder only if the indebtedness is bona fide and on the deductibility of startup expenditures and organizational expenses for partnerships following a termination of a partnership.
Determining If a Technical Termination Occurs
To determine if an LLC terminates, the practitioner must determine whether an LLC interest was disposed of in a "sale or exchange" as defined in the Sec. 708 regulations. If so, did the sale or exchange result in 50% or more of the total interests in LLC capital and profits being sold or exchanged during a consecutive 12-month period?
IRS Disallows Write-Off of Startup and Organizational Costs in a Technical Termination
New partnerships formed from technical terminations must step into the shoes of the terminated partnership and continue to amortize Sec. 195 startup expenditures and Sec. 709 organization fees using the same amortization period the terminated partnership used.
Proposed Regs. Issued on Amortization of Startup Expenses by Terminating Partnerships
The IRS issued proposed regulations aimed at preventing partnerships from using technical terminations to accelerate their deductions of startup and organizational expenses.
Current Developments in Partners and Partnerships
This article reviews and analyzes recent rulings and decisions involving partnerships. The discussion covers developments in partnership formation, income allocations, and basis adjustments
Proposed Rules Would Require Terminating Partnerships to Amortize Startup Expenditures
The IRS issued proposed regulations aimed at preventing partnerships from using technical terminations to accelerate their deductions of startup and organizational expenses.
Application of Sec. 704(c) to Divisions
There is no guidance addressing how Sec. 704(c) principles should apply when a partnership distributes an asset to multiple partners in a partnership division, including in an assets-over division, which may leave open two alternative approaches.
