Partnerships

News & Analysis as of

Changes in the UK Tax Treatment of Carried Interest

In the recent Summer Budget, the Chancellor announced that with immediate effect, there would be changes to the way that carried interest is taxed. In technical terms, the “base cost shift” which enabled an investment manager...more

Proposed Treasury Regulations Offer Guidance on Disguised Payments for Services

Fee waivers by partners for services rendered to their partnerships will now be subject to scrutiny by the Internal Revenue Service (the “IRS”), pursuant to the Treasury Department’s notice of proposed rulemaking (the...more

IRS Issues Proposed Regulations Addressing Management Fee Waivers

Certain arrangements would be recharacterized as ordinary income, rather than as distributive shares of partnership income. On July 22, 2015, the US Treasury Department and the US Internal Revenue Service (IRS) released...more

More UK Residential Property for the IHT Net

The headline-grabbing inheritance tax (IHT) news from last week’s Budget was the introduction, from April 2017, of an additional nil rate band when a residence is passed on death to direct descendants. However this is only...more

New Developments in Estate and Gift Tax Valuation Cases

A number of recent cases highlight particular issues in valuation of assets for purposes of the estate and gift tax. On July 6, 2015, the Internal Revenue Service settled Estate of Davidson v. Commissioner, T.C. Docket No....more

IRS Targets Use of Basket Option Contracts and Basket Contracts by Hedge Funds and Other Taxpayers as Tax Avoidance Transactions

On July 8, the Internal Revenue Service (IRS) issued two notices (Notice 2015-47, 2015-30 IRB 1, and Notice 2015-48, 2015-30 IRB 1) targeting the use of Basket Option Contracts and Basket Contracts as tax avoidance...more

Trademark Grammar, Concerns, and Cliches?

The Minneapolis-St. Paul International Airport is currently running this advertisement from a local law firm highlighting its “Total Partnership” program (BTW, love the website video, linked here):Although the use of the term...more

Inside the New York Budget Bill: Department Issues Guidance Regarding Investment Capital Identification Procedures

On July 7, 2015, the New York Department of Taxation and Finance issued guidance (TSB-M-15(4)C, (5)I, Investment Capital Identification Requirements for Article 9-A Taxpayers) on the identification procedures for investment...more

Northeast Natural Energy, LLC - Making History for the Future of Energy

Entrepreneurs are a special breed. The good ones have that special blend of vision, timing and risk tolerance most others lack. The really good ones find a way to use their special talents to make their communities a better...more

Master Limited Partnership Parity Act Reintroduced To House And Senate

On June 24, 2015, the Master Limited Partnership Parity Act (S. 1656) was reintroduced in the House and the Senate. The legislation would provide investors in renewable energy projects with tax breaks that are currently...more

Partnership Rules Not Applicable to Determining Recourse vs Nonrecourse Status of Debt Outside of Subchapter K

Code Section 752 and its regulations provide extensive rules as to determining whether partnership debt is recourse or nonrecourse. Such determinations are relevant for basis determination purposes under Subchapter K (the...more

Senator Targets Carried Interests

Wednesday, Senator Al Franken sent a letter to the Department of Treasury taking aim at “carried interest” income. In the letter, Senator Franken asked the IRS to revise Form 1065 (the tax return form for partnerships) to...more

Publicly Traded Partnership Proposed Regulations

Widely held partnerships are a significant source of funding for oil, gas and certain natural resources projects, but the publicly traded partnership (“PTP”) rules can cause such partnerships to be treated as corporations for...more

New Regulations Address Treatment of Corporate Partners with Appreciated Partnership Interest

After much promise, the IRS issued two sets of regulations to address the potential avoidance of gain by corporate partners. First, new § 337(d) temporary regulations, often referred to as the “May Company” regulations,...more

A ‘Clothes’ Call: Anticipating IP Issues in Partnerships

Breaking up is hard to do, in business as in life. Take the story of ‘T’ and ‘M.’ Fresh out of school, T had the vision for a clothing line. The line would be a blend of two cultures, just like its creator: Peruvian and...more

Treasury to Narrow Scope of “May Company” Regs

In the 1990s, Treasury issued proposed regulations under Regulation Section 1.337(d)-3 commonly known as the “May Company” regulations. These proposed regulations dealt with situations in which a partnership owned stock of a...more

Proposed Regulations on Publicly Traded Partnerships Affect Natural Resource Industry

The IRS proposed regulations [REG-132634-14] to provide guidance on what is “qualified income” from a publicly traded partnership’s (PTP) activities regarding minerals or natural resources, such as oil and gas fracturing...more

Is it US taxable income? Unintended consequences when US residents receive assets from their family’s foreign corporations

It is not uncommon for affluent families from certain countries to maintain offshore structures to hold a portion, and often times a significant portion, of their wealth. The reasons for holding assets outside of their...more

Guide To Doing Business in Australia: Major Forms Of Business Organisation (Update)

A foreign company or investor proposing to establish a business in Australia may choose from a number of different entities or forms of business organisation. Each of these forms has its advantages and disadvantages....more

New Rules on MLPs & Qualifying Income: What Oil Services and Exploration Companies Need to Know

On Tuesday, May 5, 2015, the Internal Revenue Service (“IRS”) released proposed regulations defining qualifying income for Master Limited Partnerships (“MLPs”). MLPs are publicly traded partnerships that are taxed as a...more

IRS Proposes Guidance for Determining MLP Qualifying Income

Proposed regulations seek to provide rules for determining MLP qualifying income from certain activities and services performed with respect to minerals or natural resources. On May 5, 2015, the Internal Revenue...more

Upper Tribunal Decision in Samarkand and Proteus

The long-awaited Upper Tribunal Decision in the Samarkand and Proteus case has been published. The case relates to statutory sale and leaseback partnerships with partners claiming losses under the film acquisition relief...more

Court Holds Taxpayer is Partner for Self-Employment Tax After Election Out Of Subchapter K

The Tax Court recently ruled that a taxpayer was liable for self employment tax based on its status as a partner, even though the partnership had elected out of the partnership tax rules....more

It’s All About the Process: Lessons from Delaware Court on MLP’s Conflicts Committee Approval

On April 20, 2015, the Delaware Court of Chancery issued a post-trial opinion in the case In Re: El Paso Pipeline Partners L.P. (C.A. No. 7141-VCL), finding El Paso Pipeline GP Company LLC, the general partner (GP) of El Paso...more

Investment Funds Update - Europe: Legal and regulatory updates for the funds industry from the key asset management centres and...

Tax: HMRC Publishes Filing Dates for New AIFM Mechanism for Partnership Deferred Remuneration Arrangements - The Finance Act 2014 introduced a provision intended to help partnerships (including LLPs) that are AIFM...more

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