In eight new FAQs on its website, the IRS covers some special issues, including several that it says will be added to the forms’ instructions.
Partnership & LLC Taxation
The Treasury Inspector General for Tax Administration recommends setting goals and benchmarks for the centralized audit regime under the Bipartisan Budget Act.
John Samtoy, CPA, discusses Schedules K-2 and K-3 for passthrough entities and U.S. persons who are partners in foreign partnerships, and how tax professionals can help clients with them.
Comment letters from the AICPA and state CPA societies also offer further recommendations.
The new schedules for returns of passthrough entities with international items have been greeted with antipathy by practitioners. The IRS provided relief Wednesday for eligible entities for tax year 2021.
Guidance includes sample worksheets and instructions for applicable passthrough entities and taxpayers.
A law change and some regulations take effect while an array of provisions expire.
Notice does not affect the status of already recognized organizations.
Forgiveness amounts are excluded from gross income but included in gross receipts for purposes including determining “small business taxpayer” status under Sec. 448(c).
The IRS posted FAQs with sample worksheets and instructions for taxpayers to use when calculating and reporting certain net long-term capital gains from partnership interests held in connection with the performance of services that must be recharacterized as short-term capital gains.
The IRS clarified the standards that an LLC must satisfy to obtain a determination letter that it is exempt from taxation under Sec. 501(c)(3).
Errors by partnerships in reporting partners’ tax capital accounts under new rules for 2020 may be excused, the Internal Revenue Service outlined.
The IRS finalized proposed regulations on certain carried interests to account for changes made by the Tax Cuts and Jobs Act (TCJA). The TCJA extended from one year to three years the holding period for making carried interests eligible for capital gain treatment.
Rules govern withholding on transfers and ECI.
Download or print this quick guide for use during tax season, and look for our quick guide for individual taxpayers in the January 2021 issue.
The IRS issued rules on two special enforcement matters for purposes of the unified partnership audit rules.
The IRS said it would issue proposed regulations allowing S corporations and partnerships to deduct “specified income tax payments” paid to state and local governments above the line and not as passthrough items for partners and shareholders.
The IRS released draft instructions for Form 1065, U.S. Return of Partnership Income, to calculate partner capital accounts using the tax-basis method.
The IRS finalized proposed regulations on withholding from transfers of partnership interests to foreign persons and the definition of effectively connected income for those purposes.
The Tax Court finds a payment was for repudiated joint venture interests, not future income.