When it comes to tax law, there are quite a few known-unknowns. These are tax questions that have been raised tangentially in court cases and rulings, but have not been fully answered. These situations confuse taxpayers. Tax practitioners are often asked to provide answers. The answers from tax practitioners often differ, as practitioners have different…
Category: Partnership Tax
Partnership Tax
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Final Regulations Issued: Leveraged Partnership Distributions Still Viable
The “leveraged partnership distribution” or “disguised sale” is a common tax savings technique used by real estate owners. Taxpayers pushed the envelope with these transactions by using “bottom dollar guarantees.” This led to guidance from the government making it more difficult to benefit from leveraged partnership distributions. The Treasury recently finalized regulations that say what…
No Tax Due on Foreign Corporation’s Redemption of U.S. Partnership Interest
Many businesses that operate outside of the U.S. want to do business in the U.S. and they want to limit their exposure to U.S. income taxes. To do this, many in-bound investments are structured as U.S. partnerships with the parntership being formed in the U.S. to carry on the business activities in the U.S. This…
Issue for the New Partnership Audit Procedures Raised in TEFRA Case
The Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) procedures were intended to make it easier for the IRS to audit partnership tax returns. TEFRA failed to deliver. The rules are nuanced and hard to apply. The new partnership audit procedures are intended to remedy this. With the new partnership IRS audit procedures coming…