The US Treasury Department and the Internal Revenue Service have issued proposed regulations providing guidance on the disguised sales of partnership interests in an attempt to prevent a repeat of tax abuses identified by Congress in the Enron case.
According to the IRS, the proposed rules are the result of concerns by some lawmakers that taxpayers were avoiding or deferring tax on the sales of partnership property and partnership interests by classifying sales as contributions of property which were followed or preceded by a related partnership distribution.
“These proposed rules benefit both the taxpaying community and the Internal Revenue Service,” stated IRS Chief Counsel, Don Korb.
He added: “The rules provide taxpayers and tax practitioners with guidance on how to structure partnership contributions and distributions without getting caught up in the disguised sale rules. They also provide for a longer disclosure period that will facilitate the examination of questionable transactions involving partnerships.”
The proposed regulations include detailed rules for determining what constitutes a transfer of consideration, such as whether and to what extent the shifting or assumption of liabilities (including partnership liabilities) among partners constitutes a transfer of consideration. An anti-abuse rule is also provided.
Furthermore, in response to the Joint Committee on Taxation's report into the Enron affair, the regulations are intended to generally extend the existing disclosure requirement for disguised sales of property and partnership interests from two years to seven years, according to the IRS.
The full text of the US Treasury's Proposed Regulations on Partnership Transfers can be found in the Tax-News Resources section.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment