Alert! New Partnership Audit Provisions Affect Foundation Investments—and a Common Estate-Planning Technique
Author: Katherine E. David.
Source: Volume 16, Number 05, July/August 2017 , pp.1-3(3)
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Abstract:
New partnership audit rules that will take effect for taxable years beginning in 2018 will have a dramatic—and potentially detrimental—effect on partnerships and their partners. The new rules will affect private foundations that own partnership interests. In particular, it is a common estate planning technique to use a family limited partnership (FLP) to provide centralized asset management and liability protection, and to create a mechanism by which one generation can transfer wealth to the next without giving up control. Family foundations, their managers, and advisors all should be aware of the new rules.Keywords: IRC §4943;“Pass-Through” entity; Tax Treatment of Prior Underreported Income; Increased Transfer Restrictions
Affiliations:
1: Strasburger & Price, LLP.