partnership Archives

Tax Planning

Why Language, Not Math, Is the First Thing That Goes Wrong with Entity Structure Problems

Consider the following scenario: Two founders form a limited liability company (LLC) taxed as a partnership. For years, they have referred to their interests as “stock.” When one founder exits, they describe the transaction as a “stock sale.” The buyer as... Juan Ojeda Jr.

Spring 2026, Tax Planning, partnership, LLC, limited liability company, stock, §754

Preparation

How to Address Unmade or Incorrect Wage Expense Disallowances for Employee Retention Credit Claims

The employee retention credit (ERC) required the disallowance of the income tax deduction for the corresponding wages in the amount of the credit received.i Uncertainty as to whether the credit amounts shown on refund cla... Patrick D. Dimmitt, EA

Winter 2025, Preparation, s corporation, partnership, Schedule C, Schedule K-1, Form 1065, employee retention credit, ERC, §3121(l), §111, Treasury Regulation §1.702-1(a)(8)(i), Form 1120S, Unvert, 656 F.2d 483 (9th Cir. 1981)

ICYMI

A roundup of recent discussions from the NAEA WebBoard. QUESTION #1: I have a client who rents out land for a solar farm. I read that a land rental cannot qualify for the qualified business income (QBI) deduction but am trying to find a ... Tynisa Gaines, EA, and Patrick D. Dimmitt, EA

Winter 2024, ICYMI, s corporation, rental, QBI, partnership, depreciation, Schedule C, Schedule K-1, §6221(b), LLC, Form 1065, §121, Form 1120-S, Rev. Proc. 2013-30, §357(c), §351, Form 8832, Reg. §1.469-2T(f)(3), §167, qualified business income, §1016, Rev. Proc. 2019-38, Reg. §1.199A-1(b)(14), solar, Treas. Reg. §301.6221(b)-1, §4.02(6), §5.02, Reg. §1.351-3, §121(d)(10), §1.1250-3(a)(3), Reg. §1.1245-2(a)(4) a, §1250(b)(3), §121(d)(6), Rev. Proc. 2002-69, Schedule SE, Schedule F, §761(f)(2)(B), Badaracco v. Commissioner, §4.03, §721, qualified joint venture, §25D(e)(8), Form 13844, direct debit installment agreement, DDIA, QJV

Preparation

Key Considerations for Enrolled Agents in the Upcoming Tax Season

The Tax Cuts and Jobs Act (TCJA) of 2017 brought substantial changes to individual income taxes, but many of these provisions are scheduled to expire at the end of 2025. As tax practitioner... Stephen Molchan, EA

Winter 2023, Preparation, TCJA, Tax Cuts and Jobs Act, s corporation, c corporation, §199A, partnership, ROTH IRA, LLC, adjusted gross income, AGI, required minimum distribution, RMD, capital gains, SECURE Act 2.0, Alternative minimum tax, limited liability company, sole proprietor

Feature Article

Are You Prepared for the Corporate Transparency Act?

As the clock strikes midnight on January 1, 2024, the Corporate Transparency Act (CTA) will come into full effect. In simple terms, the CTA requires that every company organized in the United States identifies its beneficial owne... Fernando Juarez Hernandez, EA

Winter 2023, Feature Article, corporation, partnership, Financial Crimes Enforcement Network, FinCEN, Schedule C, LLC, beneficial ownership information, Corporate Transparency Act, CTA, limited liability company, Title 26, Title 31, National Defense Authorization Act, NDAA, terrorism, money laundering, Financial Action Task Force, FATF, financial intelligence unit, FIU, Egmont Group of Financial Intelligence, beneficial owner, inactive company, BOI report

ICYMI

A Roundup of Recent Discussions from the NAEA WebBoard.i

QUESTION #1: I have a new client, an S corporation with two shareholders (married couple) who moved to Texas last year, that have hired me to prepare their 2022 tax return. The corporation purchases aircraft... Patrick D. Dimmitt, EA

Winter 2023, ICYMI, s corporation, partnership, NIMS, §263A, LLC, Form 1065, Rev. Proc. 2013-30, §4.03(1), §732(b), §168(i)(7), §358(a), §5.03, §752(b), §731(a)(1), Reg. §1.357-2(a), §357(c), Reg. §301.7701-3(g)(1)(i), Reg. §1.351-3(b), Reg. §1.351-3(a), §731, §351, Reg. §301.7701-3(c)(1)(v)(C), Form 2553, Reg. §301.6109-1(h)(1), EIN, Internal Revenue Manual 21.13.4.3.1, Rev. Rul. 99-5, Reg. §301.6109-1(h)(2)(ii), §735(a), Rev. Rul. 77-412, §732(c), Rev. Rul. 67-65, §708(b)(1), National Incident Management System, inventory, Form 3115, Reg. §1.417-1(b)(6)(iii)(E), Reg. §1.471-1(b)(3), §471(c), Form 1125-A

Representation

When Is a Return Considered Filed?

In Seaview Trading, LLC v. Commissioner,i a three-judge panel of the Ninth Circuit Court heard an appeal from the Tax Court, which tasked the court with deciding when a return ... Josh Youngblood, EA

Nov/Dec 2022, Representation, return, Tax Court, partnership, Form 1065, Ninth Circuit, §7502, Seaview, Beard test, statute of limitations, assessments, FPAA, final partnership administrative adjustment, Reg. §1.6031(a)-1(e)(1), §1.6031(a)- 1(e), §6229(a)

Tax News Briefs

Tax Season News You Can Use

Schedules K-2 and K-3 The Internal Revenue Service (IRS) has posted changes to the 2021 partnership instructions for Schedules K-2 and K-3 (Form 1065) on its website, www.ir... TheTaxBook

Mar/Apr 2022, Tax News Briefs, S Corporations, self-employment, property, partnership, mileage, Form 1040, Form 1065, foreign earned income exclusion, Schedule K-2, Schedule K-3, Form 1116, base erosion and anti-abuse tax, Form 1120-S, §250, §864(c)(8), §721(c), §7874, IRC §469, Regulation §1.469-1T(d)(1), IRC §1401, IRC §1402(a)(1), Regulation §1.1402(a)-4(c)(2), IRC §911(a), IRC §162(a)(2), Form 2555

IRS Clarifies Timing of Paycheck Protection Program Loan Forgiveness Basis Increase

Preparation

IRS Clarifies Timing of Paycheck Protection Program Loan Forgiveness Basis Increase

The Internal Revenue Service (IRS) released three new revenue procedures last month clarifying Paycheck Protection Program (PPP) loan and other federal COVID-19 grant tax-exempt income recognition, expense deductions paid with COV... Jane Ryder, EA, CPA

Jan/Feb 2022, Preparation, s corporation, partnership, COVID-19, PPP, Paycheck Protection Program, SBA loans, Schedule K-1, Form 1065, net operating loss, NOL, COVIDTRA, COVID-related Tax Relief Act of 2020, tax-exempt income, loans, Rev. Proc. 2021-49, Emergency Economic Injury Disaster Loan, EIDL, SBA 7(a) loans, Rev. Proc. 2021-50, SBA Community Advantage loans, SBA microloan, Restaurant Revitalization grants, subsidiary member, Bipartisan Budget Act of 2015, carryback, pass-through

Avoid Penalties by Doing Your Due Diligence

Tax News Briefs

Avoid Penalties by Doing Your Due Diligence

New Due Diligence Requirements For tax year 2020, the Consolidated Appropriations Act, 2021, allows eligible taxpayers to elect to use their 2019 earned income to figure the 2020 earned income credit (EIC) or additional child tax cred... TheTaxBook

May/June 2021, Tax News Briefs, penalties, partnership, Schedule K-1, earned income tax credit, due diligence, EIC, additional child tax credit, ACTC, earned income, capital account, Form 1065, §6698, §6721, §6722, generally accepted accounting principles, GAAP, §6662, §704(b)

IRS Updates Small Business Accounting Method Regulations

Tax News Briefs

IRS Updates Small Business Accounting Method Regulations

The Internal Revenue Service (IRS) has issued final regulations to implement the changes to the accounting method rules made by the Tax Cuts and Jobs Act (TCJA). Under Internal Revenue Code (IRC) §448(c), a business with gross receipts under $25 m... TheTaxBook

Mar/Apr 2021, Tax News Briefs, TCJA, s corporation, c corporation, partnership, UNICAP, NIMS, Schedule K-1, IRS Notice 2020-75, IRC §471(c), IRC §471(a), IRC §263A, IRC §448, IRC §460, IRC §471

Correcting Partnership Returns After the Centralized Partnership Audit Regime

Feature Article

Correcting Partnership Returns After the Centralized Partnership Audit Regime

Practitioners who make or find errors on a filed Form 1065 for their partnership clients may find themselves in for a bit of a shock when it comes to correcting those errors. Congress passed the Bipartisan Budget Act (BBA) of ... David Woods, EA

Mar/Apr 2021, Feature Article, Form 8978, s corporation, c corporation, nonprofit, trust, estate, partnership, audit, amended, IRA, Schedule K-1, 401(k), TIN, Bipartisan Budget Act, BBA, TEFRA, Tax Equity and Fiscal Responsibility Act, CPAR, §6221(b), §6221(a), LLC, foreign entity, disregarded entity, Reg. §301.6221(b)-1(c), Form 1065X, Form 8988

Feature Article

Preparing For The New IRS Partnership Audit Rules

Partnerships and entities taxed as a partnership, such as certain limited liability companies (LLCs), have become a popular entity choice for doing business over the past 50 years. This tax structure offers business owners significant benefits, including taxation at only the partner level. Another benefit that often goes unnoticed is that very few partnerships are audited by the IRS. Moreover, when the IRS engages in a partnership audit, t... Travis Greaves, JD, Josh Wu, JD

Mar/Apr 2017, Feature Article, tax, accounting, rules, business, expenses, income, IRS, new, partnership, audit