May 20

Opting Out? The Estate Planning Conflict with the BBA

The Bipartisan Budget Act of 2015 (the “BBA”) enacted the centralized partnership audit regime for tax years beginning after December 31, 2017. All entities taxed as a partnership are subject to these complex rules unless the partnership affirmatively elects out (and is eligible to do so) on a timely filed Form 1065, including extensions, on an annual basis. Electing out of the BBA is a common recommendation among tax return preparers, especially for smaller family-owned partnerships.

May 1

Personal Goodwill and the C Corporation Business Sale

Purchasers of a C corporation business generally prefer to buy assets to obtain depreciation and amortization deductions, while sellers of a C corporation business generally prefer to sell stock and recognize only one level of tax at long-term capital gain rates or even exclude gain if the stock qualifies under §1202.

April 24

Reverse 1031 Exchanges

Many real estate investors are familiar with a 1031 exchange, wherein a taxpayer may be able to defer the recognition of taxable gain on the sale of real property held for business or investment purposes by acquiring replacement real property. An alternative to a standard “forward” 1031 exchange is the concept of a “reverse” 1031 exchange. In a reverse 1031 exchange, replacement property is acquired prior to the sale of the relinquished property. This contrasts with a typical forward 1031 exchange, where the relinquished property is first sold, and either contemporaneously with or after which a replacement property is identified and acquired.