The new changes imposed by the Bipartisan Budget Act of 2015 established new rules for how partnerships will be audited and how they are assessed liability for federal taxes due after an examination. These new rules require that every entity that could be treated as a partnership to examine, and when needed, revise its governing documents to be able to comply with the rules. This article delves further into the new BBA rules and how partnerships may opt-out to avoid the full effects of the new consolidated partnership audit rules and push-out the adjustments to income, gain, loss, deduction, or credit to each partner of the partnership for the reviewed year by following a prescribed process. For those considering purchasing or selling partnership interests should be aware of the current responsibilities implemented by these new rules and review their partnership agreements.
Tags: Corporate, Dan M. Smolnik, Joseph Pastore, Tax
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