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Category Archives: Partnership Taxation

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Tax Court Provides Helpful Guidance on Requirements for Tax-Free Profits Interests

Introduction On May 3, 2023, the United States Tax Court held in ES NPA Holding, LLC v. Commissioner, T.C. Memo. 2023-55, that the taxpayer’s receipt of interests in a partnership in exchange for services rendered to the sole owner of the business before it became a partnership was for the benefit of the future partnership … Continue Reading

Senator Manchin Announces That He Will Not Support the Build Back Better Act – Where Things Stand Now

Today, December 19, 2021, Senator Joe Manchin (D., W.Va.) said that he opposes the Build Back Better Act, which effectively prevents its passage.  While there are no immediate prospects for the Build Back Better Act to become law, future tax acts tend to draw upon earlier proposals.  With a view to future tax proposals, this … Continue Reading

Tax Provisions of the American Families Plan

On Wednesday, April 28th, the White House announced the American Families Plan, the “human capital” infrastructure proposal.  The American Families Plan would spend $1.8 trillion, including $800 billion in tax cuts over ten years, offset by $1.5 billion in new taxes over the same period.  This blog summarizes the tax provisions of the American Families … Continue Reading

Section 1446(f) Final Regulations: Key Changes to Guidance on Non-Publicly Traded Partnership Interest Transfers by Non-U.S. Persons

On October 7, 2020, the U.S. Internal Revenue Service (“IRS”) and Treasury Department released final regulations[1] providing guidance on the rules imposing withholding and reporting requirements under the Code[2] on dispositions of certain partnership interests by non-U.S. persons (the “Final Regulations”). The Final Regulations expand and modify proposed regulations[3] that were published on May 13, … Continue Reading

Proposed Regulations on UBTI Provide Guidance to Tax-Exempt Organizations Making Fund Investments

On April 23, 2020, the Treasury Department and the Internal Revenue Service (the “IRS”) issued proposed regulations (the “Proposed Regulations”) under Section 512(a)(6) of the Internal Revenue Code (the “Code”).  Section 512(a)(6) was enacted as part of the 2017 Tax Cut and Jobs Act (the “TCJA”) and requires exempt organizations (including individual retirement accounts)[1] to … Continue Reading

Simplification of UK Partnership Tax Reporting for Investment Fund Partnerships

In the Finance Act 2018, the UK Government enacted a number of changes to the information required in partnership returns that raised the concern of undue and impracticable administrative burden being imposed on UK investment fund partnerships. The changes covered a number of areas, including requiring a UK partnership that had partnerships amongst its partners … Continue Reading

Section 1446(f) Proposed Regulations: Key Guidance on Partnership Interest Transfers by Non-U.S. Persons

On May 13, 2019, the U.S. Internal Revenue Service (“IRS”) and Treasury Department published proposed regulations providing guidance on the rules imposing withholding and reporting requirements under the Code[1] on dispositions of certain partnership interests by non-U.S. persons (the “Proposed Regulations”). The Proposed Regulations expand and in important ways modify earlier Notice 2018-29[2] on dispositions … Continue Reading

“Passthrough Deduction” Regulations Finalized

On January 18, 2019, the U.S. Department of Treasury (“Treasury”) and the Internal Revenue Service (the “IRS”) released final regulations (the “Final Regulations”) regarding the “passthrough deduction” for qualified trade or business income under section 199A of the Internal Revenue Code.[1] The Final Regulations modify proposed regulations (the “Proposed Regulations”) that were released in August … Continue Reading

U.S. Tax Reform: IRS Proposes Interest Deduction Limitation Regulations

On November 26, 2018, the Internal Revenue Service (the “IRS”) and the U.S. Department of the Treasury (the “Treasury”) issued proposed regulations (the “Proposed Regulations”) under section 163(j) of the Internal Revenue Code (the “Code”).[1]  Section 163(j) limits the deductibility of net business interest expense to 30% of “adjusted taxable income” plus “floor plan financing … Continue Reading

State Tax Law Updates

A number of states have recently proposed or passed new laws related to state-level taxation, some of which are taxpayer-friendly and some of which are expected to impose additional tax burdens on taxpayers. They vary in subject from efforts by states to mitigate the new federal limitation on the deductibility of state and local taxes … Continue Reading

Tax Reform – I.R.S. Updates Withholding Tax Guidance on Sales of Partnership Interests

On April 2, 2018, the Internal Revenue Service (“IRS”) released Notice 2018-29[1] (the “Notice”), announcing the intention of the IRS and the Department of the Treasury to issue regulations regarding the withholding requirements under Section 1446(f),[2] which was promulgated pursuant to recently enacted U.S. tax legislation, commonly referred to as the “Tax Cuts and Jobs … Continue Reading

Impact of Recent Tax Legislation on M&A Transactions

This post outlines at a high-level certain provisions under the recently enacted 2017 tax legislation (Pub. L. 115-97, the “Tax Act”) that may affect M&A Transactions.  Some of these rules are very complex, particularly in cross-border transactions, and this post describes them in general terms without all of their fine details.  The discussion of foreign … Continue Reading

House of Representatives and Senate Conferees Reach Agreement on the Tax Cuts and Jobs Act (H.R. 1): Description of the Conference Agreement and Differences from House and Senate Versions

On Friday, December 15, the U.S. House of Representative and Senate conferees reached agreement on the Tax Cuts and Jobs Act (H.R. 1) (the “Final Bill”), and released legislative text, an explanation, and the Joint Committee on Taxation estimated budget effects (commonly referred to as the “score”).  Next week the House and Senate are each … Continue Reading

U.S. Senate Passes Its Version of the Tax Cuts and Jobs Act (H.R. 1); Descriptions of the Bills Passed in the House and Senate and Outstanding Differences to be Resolved in Conference

In the early hours of Saturday morning, the U.S. Senate passed the Tax Cuts and Jobs Act (H.R. 1) (the “Senate bill”), just over two weeks after the U.S. House of Representatives passed its own version of the same legislation (the “House bill”).  Members of the House and Senate will next convene in conference to … Continue Reading

House of Representatives Passes the Tax Cuts and Jobs Act (H.R. 1); Senate Finance Committee Approves Modified Version; Comparison of the Bill Passed by the House and the Modified Senate Bill

Yesterday afternoon, the House of Representatives passed the Tax Cuts and Jobs Act (H.R. 1) (the “House bill”). The House bill is identical to the draft bill approved by the House Ways and Means Committee on November 10. Late last night the Senate Finance Committee approved its own conceptual version of the Tax Cuts and … Continue Reading

IRS Eliminates Signatures on Section 754 Elections, Offering Tax Regulatory Reform Preview (and its Complexity?)

In a notice of proposed rulemaking issued on October 11, 2017 (the “NPRM”), the U.S. Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) proposed an amendment to existing regulations (the “Proposed Regulation”) under Section 754 of the Internal Revenue Code of 1986, as amended (the “Code”). The Proposed Regulation eliminates the requirement … Continue Reading

Proposed Partnership Audit Regulations Reissued in Substantially Identical Form

On June 13, 2017, the U.S. Internal Revenue Service (“IRS”) and the Department of the Treasury (“Treasury”) re-released proposed regulations (REG 136118-15) that provide guidance on the new centralized partnership audit regime. The centralized partnership audit regime was enacted in November 2015 by Section 1101 of the Bipartisan Budget Act of 2015, P.L. 114-74, and … Continue Reading
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