Tax Deferral In Partnership Transactions May Get Harder

Law360, New York (February 10, 2014, 2:05 PM EST) -- On Jan. 30, 2014, the U.S. Treasury Department issued proposed regulations under Section 752 of the Internal Revenue Code addressing partnership liabilities and under Section 707 of the code relating to disguised sales of property.

The proposed Section 752 regulations provide new guidance on classifying and allocating partnership liabilities. The proposed regulations fundamentally alter the way economic risk of loss is determined with the goal that only “commercial” guarantees will be afforded recourse treatment, and thus be allocated to the guaranteeing partner, for income tax purposes....
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