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TAX2114 - TAX2114. Partnership Tax Update Including Partnership Distressed Debt Workout Issues

‐ Jul 29, 2021 1:45pm

Opportunities and obstacles presented by recent legislation and the 2021 final regulations governing partnership and partner §163(j) business interest expense will be covered during this session -- including tactics involving aggregation of gross receipts, trading partnerships, self-lending, debt-financed distributions, tiered partnerships, guaranteed payments, electing real property trades or businesses, relief for BBA partnerships, and CARES Act benefits. We will discuss strategies for carried interest holders to avoid being inadvertently trapped by the TCJA three-year holding period rule in light of the 2021 final regulations -- including ensuring relief for partnership capital interests, avoiding the look-through rule for dispositions, and understanding the special rule for transfers to related parties. In addition, we'll cover tax advantages of converting partner loans to a partnership interest rather than modifying the loan, along with distinguishing debt from equity.

Learning Objectives:

  • Analyze the §163(j) final regulation rules providing guidance to partnerships and partners, and the related CARES Act benefits.
  • Discover how to avoid the potential traps presented by the 2021 final regulations with respect to carried interests.
  • Analyze the benefits of debt to equity exchanges with respect to partner loans.
  • Predict the potential tax trap inherent in partner loan modifications.


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