Rep. Camp (R-MI), Chair of the House Ways and Means Committee, introduced a discussion draft of tax reform proposals for small business, mostly addressing pass-through entity taxation. Rep. Levin (D-MI) issued a statement noting that many of the Camp proposals have bi-partisan support. The proposal also includes two alternative reform proposals for partnerships and S… Continue Reading
Category Archives: Passthrough Entity
Subscribe to Passthrough Entity RSS FeedFinal Regulations Issued on Non-Compensatory Partnership Options
Posted in General, Joint Venture, Partnership/LLC, Passthrough EntityThe IRS finalized the 10-year-old proposed regulations on the treatment of non-compensatory partnership options. The IRS also published some clean-up changes in Announcement 2013-28. In general the final regulations follow the taxpayer-favorable approach of the proposed regulations to treat the exercise of a non-compensatory option as tax-free to the partnership and the partners under section 721. … Continue Reading
CBO Report Examines Shifting of Tax Base To Pass-through Entities
Posted in Corporate, Legislative, Partnership/LLC, Passthrough Entity, S corporationA new Congressional Budget Office Report shows a shifting of business structures to using pass-through entities, subjecting the income only to the individual income tax (as compared to the corporate income tax). The report notes that the shift has reduced federal revenues but has probably promoted overall investment and a more efficient allocation of resources. The… Continue Reading
Long-Awaited Regulations Issued on New 3.8% Net Investment Income Tax
Posted in Compensation, General, Partnership/LLC, Passthrough Entity, Real EstateThe IRS issued long-awaited proposed regulations and related FAQ guidance on the new Section 1411 3.8% tax on Net Investment Income. The 3.8% Medicare tax is part of the tax provisions in the Affordable Care Act to pay for health care reform. The IRS also issued proposed regulations and FAQs on the related Section 1401… Continue Reading
IRS Clarifies Contributions to Charity’s Single-Member LLC Are Deductible
Posted in General, Partnership/LLC, Passthrough Entity, Tax ExemptAfter much anticipation, the IRS clarified that donors can receive the same charitable deduction for gifts made either directly to a parent charity or to a domestic tax-disregarded entity held by the charity. Specifically, Notice 2012-52 addressed gifts made to a domestic single-member limited liability company (SMLLC) solely-owned by a U.S. charity. The Notice concludes… Continue Reading
New IRS Safe Harbor on When COD Is Qualifying Income for Publicly Traded Partnerships
Posted in Cancellation of Debt Income, Partnership/LLC, Passthrough EntityThe IRS issued Rev. Proc. 2012-28, providing a helpful safe harbor for publicly traded partnerships (PTPs) to avoid non-qualifying PTP income from debt cancellation. Prior to this guidance, PTPs did not have clear guidance on whether Cancellation Of Debt (COD) income was qualifying income for PTP qualification purposes. PTPs need minimum amounts of qualifying income… Continue Reading
Featured in the New York Times – The Advantages and Risks of Gingrich’s Tax Strategy
Posted in General, Partnership/LLC, Passthrough EntitySteven R. Schneider, a tax lawyer, said that not all companies were suited for the S corporation, a tax structure used by Newt Gingrich. Steven Schneider was recently featured in an article in the New York Times regarding New Gingrich’s tax planning strategy. “Steven R. Schneider, a partner at Goulston & Storrs,… Continue Reading
Legislative Talk of Taxing Large Passthrough Entities
Posted in Legislative, Partnership/LLC, Passthrough EntityIt is reported in the press that Senate Finance Committee Chairman Max Baucus (D-Mont.) said that taxing large passthrough entities as if they were corporations may be a necessary part of any corporate tax reform effort. Baucus is reported to have said that taxing certain passthroughs would have to be considered in order to be… Continue Reading
District Court Finds Performance Fee Not Partnership Interest, No Capital Gain Treatment
Posted in Partnership/LLC, Passthrough EntityA taxpayer lost its argument to recast its performance fee for asset management as a partnership profits interest, losing favorable capital gains treatment. In Rigas v. U.S., the Southern District of Texas held that the taxpayer’s $20 million gain from a residual share of profit was ordinary service income. The court carefully analyzed the fine… Continue Reading
Subscribe to this blog via RSS
Retail Law Advisor
Goulston & Storrs
Follow us on Twitter
Subscribe to this blog by email
Follow Us on LinkedIn