News & Analysis as of

K-1

In Dispute Over Partnership’s Conversion to LLC, Court Finds No Duty to “Spoon-Feed” Sophisticated Investor

by Farrell Fritz, P.C. on

Pay attention to your K-1s or they may come back to bite you, is the lesson of Bruder v Hillman, Docket No. A-5055-15T1 [N.J. Super. Ct. App. Div. June 27, 2017], decided last week by a New Jersey appellate panel which...more

Tax Update, Volume 2017, Issue 2

by Pepper Hamilton LLP on

THE NEW REGULATIONS EXPAND THE FILING REQUIREMENTS FOR FORM 5472 TO INCLUDE DISREGARDED ENTITIES WITH FOREIGN OWNERS WHEN THERE ARE CERTAIN REPORTABLE TRANSACTIONS. If a non-U.S. person (individual or corporation)...more

Practical Partnership Tips: Electronic K-1s and Addressing New Partnership Audit Rules: Tax Update Volume 2017, Issue 2

by Pepper Hamilton LLP on

Partnerships and limited liability companies should begin thinking about addressing the issues presented by the new partnership law in their agreements, even if further changes will be necessary once regulations are issued....more

No Seriously, When is My Return Due?

It’s that time of the year again. Or maybe it isn’t. Effective for tax years beginning on or after December 31, 2015, the filing deadlines for many common federal tax returns have changed. As a result, taxpayers coming...more

IRS Clarification Causes Many Partnerships to Change Compensation Reporting for Partners

by Clark Hill PLC on

A federal tax issue frequently arises when key employees of an operating business are given the opportunity to become equity holders. Despite the well-established rule that partners of a partnership are not permitted to be...more

Could your Oil and Gas Interest Cause You to Be Responsible for Multiemployer Plan Withdrawal Liability?

I noticed an interesting case from the Tenth Circuit which found that a two to three percent working interest in an oil and gas venture could generate self-employment income for the owner of that interest. The individual in...more

No Obligation to File Inaccurate Return to Avoid Failure to File Penalty

by Charles (Chuck) Rubin on

A partnership was a partner in a Cayman Islands partnership - that investment made up most of its assets. The Cayman Islands partnership did not file a Form 1065 income tax return and did not give a Form K-1 to the taxpayer...more

Individuals Granted Profits Interests Are Treated as Partners, Not Employees

by Reed Smith on

The Internal Revenue Service (the “IRS”) issued temporary and final regulations, effective May 4, 2016, clarifying the employment tax treatment of partners in a partnership that owns a disregarded entity (the “Final...more

Divorce and K1 Adjustment of Status

by Ronald Shapiro on

Recipients of a fiancé visa, officially known as a K-1 visa are required to marry only their United States’ citizen petitioner. After the marriage, the foreign citizen must then file for an adjustment of status within 90 days...more

The New Partnership Audit Regime Will Be Here Soon – Are You Ready?

by Garvey Schubert Barer on

On November 2, 2015, the Bipartisan Budget Act (“Act”) was signed into law by President Barack Obama. One of the many provisions of the Act significantly impacts: (i) the manner in which entities taxed as partnerships will be...more

Marrying a U.S.Citizen: Which Visa is Right for You?

by Ronald Shapiro on

When United States citizens and foreign-born individuals decide to tie the knot, there can be a variety of obstacles that get in the way. While things like language barriers, religious customs and cultural misunderstandings...more

Be Careful in Granting Profits Interests to Your Key Employees; New IRS Regulations Suggest the IRS is Keen on Form K-1 Filing

by Locke Lord LLP on

On May 5, 2016, the Department of Treasury and the Internal Revenue Service published final and temporary regulations amending Treasury Regulations §301.7701-2 under Section 7701 of the Internal Revenue Code of 1986, as...more

IRS Sets Short Fuse for Comments, Guidance on New Partnership Audit Rules

by K&L Gates LLP on

As if it wasn’t going to be busy already, the Internal Revenue Service (“IRS”) has set Tax Day, April 15, 2016, as the due date for comments on significant new partnership audit rules. This new law, which was enacted as part...more

Top Five Challenges to Gaining a K-1 Visa

by Ronald Shapiro on

The total number of K-1 visa applications in 2015 was just under 44,000. 31,000 of these were approved. So, a majority of K-1 visas are granted, but a significant amount are denied. Fortunately, nearly 7,000 were approved on...more

New Partnership Audit Procedures May Dramatically Affect the Assessment and Collection of Taxes Relating to Partnership Activities

by Shearman & Sterling LLP on

The Bipartisan Budget Act of 2015 (the “BBA”), which was signed into law in November 2015, includes sweeping changes to the rules governing federal tax audits of entities treated as partnerships for US federal income tax...more

K-1 Visa Program Under Federal Investigation

by Ronald Shapiro on

K-1 fiance visas offer an option for family-based immigration visas that may require less paperwork and  filing fees than spousal visas. Compared to spousal visas that can take up to two years, fiance visas only take five to...more

Responsibility for Deficiencies Will Shift to Partnerships Under New Audit Rules

by BakerHostetler on

Effective for tax years beginning after December 31, 2017, any additional tax or penalties resulting from a partnership audit will be assessed and collected at the partnership level in the year the audit is completed....more

New Tax Audit Regime Constitutes a Sea Change for Partnerships

by Latham & Watkins LLP on

Legislation impacts tiered partnerships and M&A transactions. Existing partnerships should review operating agreements before new rules take effect. The Bipartisan Budget Act of 2015 (the Act), which President Obama...more

"Congress Overhauls Partnership Audit and Litigation Procedures"

On November 2, 2015, President Barack Obama signed into law the Bipartisan Budget Act of 2015 (the Act). The Act overhauls the partnership audit and litigation rules in the Internal Revenue Code, repealing both the provisions...more

Sweeping Change to Partnership Tax Audit Procedures

by Stinson Leonard Street on

A major change to partnership audits was signed into place by President Barack Obama on November 2nd following the passage of the Bipartisan Budget Act of 2015 by Congress on October 30th. Previously, partnerships with more...more

New 871(m) Regulations Finalize Dividend Equivalent Payment Withholding Rules for Equity Derivatives

On September 17, 2015, the IRS and the Treasury Department issued final, temporary, and proposed regulations under section 871(m) of the Internal Revenue Code (collectively, the “new regulations”) that provide the rules for...more

Domestic Partnership Agreements: Financial Disclosures and Privacy

by Carlton Fields on

To reduce risk of later attack on the domestic partnership agreement, domestic partners should make fair and reasonable financial disclosures to each other prior to signing the agreement. Each partner should disclose to the...more

New Tax Provisions Affecting Filing Deadlines For Partnerships, Corporations and Trusts (8/15)

On July 31, 2015, President Obama signed into law P.L. 114-41, the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015." Although this new law was primarily designed as a 3-month stopgap extension...more

Guaranteed Payments: the Equivalent of a Salary for LLC Members and Partners

by Varnum LLP on

Absent special elections to be taxed differently, partnerships and limited liability companies (referred to herein as “entities”) with two or more partners or members (referred to herein as “owners”) are taxed on a...more

Requesting, Obtaining and Reporting the Personal Information of the Beneficiaries of a Trust

With another tax season recently behind us, the Internal Revenue Code and its many reporting requirements are fresh in our minds. Do you encounter beneficiaries who want to know why you need so much of their personal...more

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