Archive: partnership

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Starting a Law Practice – Part 3: Choice of Entity

A previous post in our blog series for entrepreneurial attorneys focused on the importance of a solid business plan, and a critical part of that process is determining the entity structure for your new company. A law practice can operate in a variety of forms: sole practitioner, partnership, professional corporation, or limited liability company. A […]
March 17, 2015
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  • Aronson

Hedge Fund Schedule K-1s and U.S. Foreign Reporting

Hedge funds are investment partnerships that issue a Schedule K-1 to investors which are partners in the partnership. The Schedule K-1 reports the partner’s distributive share of the taxable income, gain, loss, deduction and credit from the partnership. The Schedule K-1 is filed with the hedge fund’s U.S. federal partnership tax return. Hedge funds issue […]
September 22, 2014

Proposed IRS Regs May Fundamentally Change Partnership Debt Allocation Rules

The debt obligations of partnerships are allocated among the partners and are included in the determination of a partner’s basis. Among other things, partnership basis is important because it allows for the deduction by partners of their allocable share of partnership losses. Under existing regulations, partnership liabilities are generally divided into two categories: recourse and […]
February 13, 2014
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  • Aronson

Tax Planning Strategies for Doing Business Abroad

These days, many emerging businesses find themselves doing business abroad. Technology has drastically changed the traditional business model, enabling even a small business to operate globally.  Many companies often ask whether they should operate through their existing U.S. business (i.e., operate as an incorporated “branch”) or operate through a separate organized foreign entity. Quite often, […]
September 6, 2013

Exploring Cash Basis Eligibility for a Competitive Edge

If you are a primarily a service-based business that has elected to utilize a pass-through tax operating structure treatment (i.e., S Corporation or partnership) and are not currently reporting your taxable income on the cash method, you are most likely at a disadvantaged cash flow financing position as compared to your competition. Unlike you, your competition is […]
July 5, 2013

Important Tax Considerations When Selling Your Business

Ready to negotiate the sale of your business? First you should sit down with your tax advisor to gain a general understanding of the major tax considerations and constraints that should be evaluated. Partnerships, LLCs, C Corps, and S Corps all have various entity-specific tax consequences that should be evaluated before making any decisions. The decision analysis […]
June 9, 2013

Nonresident Foreign Individual’s Gain from Sale of U.S. Partnership Interest Is Taxable ECI

In Legal Advice Issued by Field Attorneys (LAFA 20123903F), the IRS ruled that a nonresident foreign individual’s gain on the sale of an interest in a U.S. partnership was subject to U.S. federal taxation.  The gain on the sale was taxable as effectively connected income (“ECI”).  The gain was also subject to an interest charge […]
May 31, 2013

Caution: More than One Type of U.S. Federal Tax Withholding Could Be Required for Foreign Partners in a U.S. Partnership

It is very important for a U.S. partnership to determine the residence status of all partners in the partnership. A U.S. partnership is required to report whether a partner is a foreign partner on the Schedule K-1 filed with the Form 1065 federal partnership tax return. A partner is considered to be a foreign partner […]
April 16, 2013

The Basics to Know About Foreign Tax Credits

1. Foreign Taxes Paid by a U.S. Company Conducting Business Activities Directly in a Foreign Country or through a Foreign Branch C Corporation – A U.S. company that is a C corporation which conducts business in a foreign country directly or through a foreign branch may claim a foreign tax credit for foreign taxes paid […]
October 25, 2012