Tag: partnerships
What happens to tax basis upon death of a business partner?
Upon an individual's death, the estate must report the tax basis of all assets for estate tax purposes based on their fair market values at the date of death or an alternate valuation date if elected. Assets exceeding their tax...
What to consider when structuring 1031 partnership exchanges
Partnerships present challenges for tax planning, particularly regarding the deferral of capital gains through a 1031 Tax Deferred Exchange. Partnership interests are excluded from 1031 Exchange treatment under IRS Section 1031 because they are considered personal property, even if the...
SR Client Question: Can partners concurrently be employees?
A partner CANNOT be an employee of the partnership. This conclusion is per the following: a) I.R.S. Revenue Ruling 69-184 (1969-1 CB 256, IRC Sec(s) 3121, b) General Counsel Memorandum 34173, 7/25/1969, IRC Sec(s) 119 c) General Counsel Memorandum 34001,...
Changes to partnership audit procedures may prompt the need for review
Congress recently enacted significant changes to partnership audit and adjustment rules, expected to lead to higher audit rates for partnerships. Partners should carefully review and possibly revise their partnership's operating agreement in response to these changes. While these rules generally...
A summary of partner distributions and preference payments
A partnership distribution refers to the transfer of cash or property from a partnership to a partner related to their interest in partnership capital or income. Excluded from distributions are loans to partners, payments for services or property use (like...