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Course Details

Partnership Debt Allocations And New IRS Regulations: Minimizing Tax Consequences Meeting Challenges of IRS Crackdown on Leveraged Partnerships, Mitigating Liabilities Under the Disguised Sales Rules

Webinar: ID# 1026556
Recorded CD or On-Demand
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About This Course:
This CLE/CPE webinar will provide tax advisers with a thorough and practical guide to the challenges of allocating recourse and nonrecourse partnership debt, including a critical review of the Treasury regulations issued under IRC §§707 and 752. These regulations significantly changed rules related to the allocation of partnership liabilities and partnership “disguised sales.” The regulations cut back sharply on deferral opportunities using “leveraged partnerships” and eliminate gain deferral through the use of “bottom guarantee” structures.

The IRS issued a sweeping package of regulations which changed the rules governing the allocation of partnership liabilities, effective Oct. 2016. The new regulations cut back on deferral opportunities using “leveraged partnerships,” and eliminate gain deferral through the use of “bottom guarantee” structures. These new rules immediately and dramatically affected virtually all partnerships with debt as part of their funding structures.

Under the revised rules, bottom-dollar obligations defined in the regulation will no longer be considered recourse liabilities but will instead be treated as nonrecourse debt and allocated to all partners within the partnership. These changes will result in a scenario where a partner who serves as a guarantor for a loan to the partnership can be at economic risk for the amount of the guaranty, while not receiving any recourse debt allocation for the amount at risk.

While the U.S. Treasury reported to the President in Oct. 2017, proposing substantial revisions to certain of its regulations issued after Jan. 1, 2016, the report did not recommend significant changes to the proposed and temporary regulations on bottom-dollar guarantees.

While the focus of the initial regulations is related to debt structures as an indicator of a disguised sale, the additional rules are likely to dramatically impair the ability of partnerships to utilize debt allocation structures to attract investors. Tax advisers must react quickly to ensure their clients’ partnership structures are compliant with the new rules.

Listen as our experienced panel provides a critical first look at the new partnership debt regulations and offers practical guidance on protecting client partnerships from costly tax consequences.

Outline
  • Background on Sections 707 and 752
  • Overview of new Section 752 regulations
    • “Bottom dollar” guarantees and similar arrangements
    • Proposed regulations’ anti-abuse rule
    • Effective date/transitional rules
  • Overview of new Section 707 regulations
    • Treatment of all liabilities as nonrecourse
    • Effective date/transitional rules
  • Practical impact of new rules
    • Impact on common business transactions such as “leveraged partnerships” and “asset drop-down transactions”
    • Alternative planning techniques
Benefits

This panel will review these and other key issues:
  • Distinguishing recourse from nonrecourse partnership debt
  • The impact of the new regulations on common business transactions, such as leveraged partnerships and asset “drop-down” transactions
  • What tax advisers must do now to prepare partnership clients for the new regulations
How To Access Course And Materials

Handout materials and the phone number for live presentations are made available to you one day prior to the event via email from the presenter. Copies of the presentations are included with recorded versions.

If you order a recorded version of the webinar, CDs will be mailed out approximately 10 days after the live event. Shipping is included in the price of recorded versions.

Continuing Education Credits Available

This program has been approved for 2.0 CPE hours through Strafford Publications. To obtain CPE credit, attendees must participate in the live event (recorded versions do not qualify for credit), return an Official Record of Attendance to Strafford affirming their participation (including the CPE code announced during the program), and pay a processing fee of $35 per person.

Strafford will mail a certificate of credit within approximately two weeks of receiving your completed Official Record of Attendance, provided all required conditions have been satisfied.

Strafford is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit.
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Partnership Debt Allocations And New IRS Regulations: Minimizing Tax Consequences Meeting Challenges of IRS Crackdown on Leveraged Partnerships, Mitigating Liabilities Under the Disguised Sales Rules
Available on CD or On-Demand formats
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