The purpose of this course is to provide an in-depth discussion of selected advanced-level issues affecting LLCs and LLPs.
Learning Objectives
- Identify tax and nontax advantages and disadvantages of LLCs and partnerships
- Describe how inside and outside basis is affected by liabilities, recourse and nonrecourse
- Discuss the impact of cash and property distributions
- Explain the tax consequences of a sale of an interest and distinguish such consequences from the tax consequences when a partnership or LLC is acquired or merges into another LLC or partnership
- Complete a case study to improve advocacy skills before the IRS
Major Topics
- The Inflation Reduction Act of 2022
- Single-member limited liability companies as an alternative to subsidiaries
- Cancellation of indebtedness rules and regulations
- How the IRS views members or partners for Social Security purposes
- Special problems when forming an LLC
- Debt issues and problems in structuring LLCs and LLPs, including loan guarantee issues, recourse and nonrecourse debt, the at-risk basis rules, and new regulations restricting bottom-dollar guarantees
- Distribution or a disguised sale? New regulations eliminate certain tax-deferred leveraged partnership transactions
- Death or retirement of a member or partner – understanding the alternatives
- Step-up in basis issues – how to make the computations and elections
- Property transactions between the LLC/LLP and its members or partners – what to do with built-in gain or loss property
- When are partnership losses deductible? The TCJA and CARES Act overrides
- Material participation rules for LLC members and limited partners and how they affect passive loss issues
- Continuation and termination of an LLC/partnership in the context of a merger or acquisition
- Sales of an LLC interest – holding period and hot asset issues
- Impact of the tax on investment income on the sale of an interest in a partnership or LLC
- Repeal of the technical termination of partnership provision
- Impact of Soroban Capital Partners LP, 161 TC No.12
- NEW: The IRS removes recently finalized regulations identifying certain partnership basis shifting transactions as transactions of interest (see Chapter 2)
