The 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
Tag Archives: 108
Final Regulations Address Partnership Debt-For-Equity Transactions
Posted in General, Joint Venture, Partnership/LLC, WorkoutsToday the IRS issued final regulations under section 108(e)(8) to clarify the mechanics of loan workouts when a lender contributes its loan in exchange for equity in the borrower-partnership. In 2004, Congress extended this historical corporate rule to partnerships, providing that the partnership is required to recognize cancelation of debt (COD) income to the extent… Continue Reading
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