Partnership Audit Tax

Tiered Partnership Regulations – New Audit Rules

IRS Releases Tiered Partnership Regulations as Part of Implementation of New Partnership Audit Rules On December 19, 2017, the IRS published the latest regulations implementing the centralized partnership audit regime passed into law as part of the Bipartisan Budget Act (BBA) of 2015. These proposed regulations provide rules on the ability of pass-through partners to…

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NOL Provisions In Final Tax Reform Bill

NOL Provisions in Tax Cuts and Jobs Act This article will focus on the changes made by the recently enacted Tax Cuts and Jobs Act to the provisions regarding net operating losses (NOLs). These significant changes are outlined in the table below: NOL Provisions in Final Tax Reform Bill   Current Law Tax Bill NOL…

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IRS Finalizes Form Modifications Disregarded Entities with Single Foreign Owner

IRS to Finalize Form Modifications for Taxpayer Compliance with Regulations on U.S. Disregarded Entities with a Single Foreign Owner This past April we published a blog article regarding the final regulations released by the Internal Revenue Service (IRS) that apply to U.S. disregarded entities (hereafter referred to as “U.S. DEs”) wholly-owned by a foreign person.…

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Centralized Partnership Audit Regime: International Regulations

As the 2018 implementation of the centralized partnership audit regime passed under §1101 of the Bipartisan Budget Act (BBA) of 2015 is fast approaching, the Internal Revenue Service (IRS) is releasing a myriad of regulations to provide a framework for compliance by taxpayers. This new audit regime generally applies any tax burden or penalty arising…

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Tax Reform Cost Recovery Provisions

Cost Recovery Provisions in Tax Reform   Both the House and Senate passed versions of tax reform make substantial revisions to the cost recovery provisions affecting businesses in the Internal Revenue Code (IRC). These proposed changes are outlined in the following chart.   Cost  Recovery Provisions in Senate and House Versions of Tax Reform  …

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Partnership Targeted Capital Accounts

Partnership Targeted Capital Accounts: Part III

Introduction Part I of this article described the overall concept behind the targeted capital account approach to allocating taxable income and loss. Part II presented a general example of how a targeted capital account analysis functions when a partnership agreement provides for preferences with respect to partnership distributions. This Part III will address a variety…

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Tax Reform Legislation: Impacts on the Real Estate Industry

Tax Reform Legislation: Impacts on the Real Estate Industry     House vs. Senate Bill Specific to Real Estate Industry   House Senate Tax Rates on Pass-Through Entities 25% maximum tax rate on qualified business income (QBI) of partnerships, S corporations, and sole proprietorships; QBI is 100% of net business income from passive activities and…

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Tax Reform Legislation will Overhaul NOL Provisions

Both the House and Senate versions of tax reform propose significant changes to the treatment of net operating losses (NOLs). The current tax code generally allows a two-year carry back deduction of NOLs and a carry forward of 20 years to offset future income.   The House bill proposes the following changes: NOLs cannot offset…

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Tax Reform Timeline

Everyone is wondering how Tax Reform will be on President Trump’s desk before Christmas. Here is an estimated timeline as of 11/16/2017 according to the goals of Congress and the White House.   Sprint to Tax Reform 11/2/2017                House Bill revealed 11/9/2017                Senate…

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Tax Reform Loophole

Potential Pass-Through Entity Loophole in Tax Reform

● The Tax Cut and Jobs Act proposes setting a maximum tax rate of 25% on pass-through business income. While lawmakers intend to benefit small business owners with the new, lower tax rate, many are concerned that certain individuals will abuse the provision by re-categorizing wage income taxed at a maximum 39.6% rate as pass-through…

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