New IRS Regulations Impact LLCs and Partnerships – Part 4: Push-Out Elections
On January 1, 2018, new IRS regulations are poised to take effect that will have consequences for both limited liability companies (LLCs) and partnerships. A well-structured entity reaps many benefits—liability protection, tax savings and asset protection among them—so attention to the evolution of the new centralized partnership audit regime is critical.
Under the IRS’s proposed regulations (REG-136118-15), adjustments to income, gain, loss, deduction or credit—and any resulting underpayment—will be calculated at the level of the partnership or LLC rather than the level of the individual partner or member. In this Part 4 of a series on the regulations, CGS3 partner and tax practice team chair Phil Jelsma discusses a push-out election, which allows the entity to shift the burden of paying any interest or tax onto the individuals.
The remainder of the series will continue to examine aspects and consequences of the regulations, including the role of the partnership representative and the consistency requirement.
Part 1 of the series (Overview) can be read here: Los Angeles Daily Journal / San Diego Daily Transcript.
Part 2 of the series (Opting Out) can be read here: San Diego Daily Transcript.
Part 3 of the series (Rules of Adjustment) can be read here: Los Angeles Daily Journal / San Diego Daily Transcript.