IRS Proposed Regulations Limit Tax-Free Contributions and Distributions of Leveraged Property to and from Partnerships, Reduce Partnership Deduction Allocation Flexibility
On January 30, IRS proposed income tax regulations reducing flexibility to allocate partnership deductions. The regulations also limit tax-free contributions and distributions of leveraged property, including mortgaged real estate, to and from partnership entities. The taxation of partnerships and many LLCs could change. Old transactions are not permanently grandfathered. Pre-existing…