Eighth Circuit Denies Like-Kind Exchange Treatment to Taxpayer Attempting to Avoid Related Party Rules of Section 1031(f)

By slooney | March 30, 2015

In North Central Rental & Leasing, LLC,[1] the Eighth Circuit Court of Appeals determined that the taxpayer, North Central Rental & Leasing, LLC (“North Central”) had improperly claimed non-recognition treatment under Section 1031 with respect to gains from certain property exchanges. Butler Machinery Company (“Butler Machinery”) sold agricultural, mining and construction equipment for manufacturers, primarily…

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IRS Rules That Members of LLC Are Not “Limited Partners” for Purposes of Avoiding Self-Employment Tax

By slooney | September 24, 2014

  In ILM 201436049 (9/5/2014), the IRS found that members of a management company LLC (“Management Company”) were not “limited partners” within the meaning of Section 1402(a)(13) and therefore were subject to the self-employment tax on their distributive shares of income of the Management Company.   Under the facts of the ruling, a limited liability…

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Can a Partner of a Partnership or a Member of a LLC Be treated as an Employee?

By slooney | August 21, 2014

  On 6/13/2014, Curtis Wilson, IRS Associate Chief Counsel (Passthroughs and Special Industries) stated that he is concerned about the rumored use of a disregarded entity to enable a partner to be treated as an employee for withholding purposes.[1]  Under the purported structure, a partnership creates a wholly-owned entity that is disregarded for federal income…

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IRS Issues Final Regulations on Back-To-Back Loans

By slooney | July 24, 2014

  On July 23, 2014, the Department of the Treasury issued Final Regulations on basis increases for back-to-back loans involving S corporations.  The Final Regulations adopt the proposed regulations without substantive change, except for changes allowing a retroactive effective date (which is a positive change to the Proposed Regulations) and minor clarifying revisions.  The Proposed…

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Steve Looney Speaks at University of Texas 61st Annual Taxation Conference

By slooney | December 6, 2013

Dean Mead attorney Stephen Looney was a featured speaker at the University of Texas 61st Annual Taxation Conference held in Austin, Texas on December 5th, 2013.  Mr. Looney’s presentation was entitled “Compensation Reclassification Risks for S and C Corporations.”  The presentation discussed how the IRS and the Courts are addressing the reclassification of compensation and other payments…

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Tax Court Holds that Conservation Reserve Program Payments From USDA Are Subject to Self-Employment Tax

By slooney | December 3, 2013

In Morehouse,[1] the Tax Court held that the payments received by the taxpayers from the United States Department of Agriculture (USDA) Conservation Reserve Program (CRP) constituted self-employment income subject to the self-employment tax imposed under Section 1401. The taxpayer owned a number of acres of land in South Dakota, which he did not personally farm…

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Congress Again Discussing Closing of Purported S Corporation “Loophole”

By slooney | November 25, 2013

Tax Analysts has obtained a copy of a list of tax breaks which Democrats are targeting for savings as part of the Joint Conference Committee on the Budget.[1]  The list highlights the so-called “S corp loophole,” which the Budget Committee states “is a loophole … that allows certain wealthy professionals to avoid paying payroll taxes…

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Stephen Looney Speaks at NYU Tax Institute

By slooney | November 22, 2013

Dean Mead attorney Stephen Looney was a featured speaker at the 72nd NYU Tax Institute in San Francisco, California on November 20th, 2013.  Mr. Looney’s presentation was entitled Tax Effects of Converting Entities Under Check the Box, State Law Conversion Statutes, State Law Merger Statutes and “Manual” Conversions.  The presentation examined the federal tax consequences of changing…

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