Article Abstract:
The IRS has issued Proposed Regulations regulating transfers of interests in partnerships. To be genuine, the transfer must represent an exchange of a contribution to the partnership for an entrepreneurial interest. If this exchange does not occur, the transaction will be recognized as a disguised sale under Proposed Regulations for Section 707(a)(2) of the Internal Revenue Code. Disguised sales are exchanges between the partnership and persons other than members of the partnership. Transfers made more than two years apart between a partnership and a partner are not recognized as sales, while transfers made within two years are recognized as sales.
User Contributions:
Comment about this article or add new information about this topic:
Article Abstract:
The IRS has issued Proposed Regulations affecting the treatment of losses in consolidated groups that have the effect of limiting their net operating losses. The Proposed Regulations apply Section 382 of the Internal Revenue Code with a single entity approach to consolidated groups in those years that are not separate return limitation rule years. The single entity approach treats subsidiaries as divisions of a single taxpayer, with the parent recognized as the agent for each division. While the Proposed Regulations are favorable for taxpayers, they are complex.
User Contributions:
Comment about this article or add new information about this topic:
Article Abstract:
The Temporary and Proposed Regulations from the Internal Revenue Service related to tax straddles are explained. Tax accounting rules apply to wash sales, short sales, loss deferrals and mixed straddles. The regulations are designed to prevent taxpayers from converting short-term capital gains and ordinary income into long-term capital gains for income tax purposes through the use of tax straddle transactions. Examples of proper and improper tax accounting procedures under the regulations are provided.
User Contributions:
Comment about this article or add new information about this topic: