Treatment of partnership nonrecourse liabilities clarified by new Regulations
Article Abstract:
Amendments to the Regulations under Sections 704 and 752 clarify the treatment of partnership nonrecourse liabilities in order to limit the circumvention of Section 704(d) limitations on partnership loss. The amendments seek to limit the overstating of the amount of a partners' economic risk of loss by requiring that the economic risk of loss of a partner for nonrecourse liability be computed for interest on liability after the date of determination. The amendments: clarify the application of the de minimis rules; grant related natural persons a 100% share of related ownership; and treat a partner granting the partnership a loan through another entity as a creditor or guarantor. Nonrecourse distribution rules are amended to provide that a distributions of proceeds of a nonrecourse liability do not decrease or increase the deficit balance in capital account.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1990
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Partnership rules clarified as part of new law
Article Abstract:
With regard to partnership transactions and the taxation thereof, the Tax Reform Act of 1986 serves to clarify some of the more ambiguous provisions in the Deficit Reduction Act (DRA) of 1984. For example, donations of property to partnerships that are followed by cash contributions to the donor will be considered property sales for tax purposes, whereas under DRA these "disguised sales" could be classified as partnership contributions. Similarly, the tax reform law requires that: partnership expenses be attributed to partners who were in the partnership when the expenses were incurred; corporations realize gain from nonliquidating partnership distributions to the extent of the corporation's recognition of property from the partnership; only distributed partnership interests be subjected to these sale-and-exchange tax treatment rules.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1986
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Workings of new partnership audit procedures clarified by new final and Proposed Regs
Article Abstract:
New guidelines cover the definition of partnership items that are evaluated at the partnership level. The regulations will affect S corporation stockholders. New Proposed Regulations entail the handling of such items and the different issues that have resulted under these audit regulations.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1986
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