IRS Clarifies Terminating Partnership Deduction Rules

Law360, New York (December 6, 2013, 2:31 PM EST) -- The Internal Revenue Service on Friday released proposed regulations clarifying that a terminating partnership does not entitle U.S. taxpayers to deduct certain startup expenses.

The regulation, which is scheduled to be published in Monday's Federal Register, aims to provide clarity on the proper tax treatment of certain startup costs associated with a partnership that is formed following a terminating partnership — a special type of transaction described in the tax code.

The Internal Revenue Code describes a technical termination as the the exchange or sale of...
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