Experts Interpret Much Needed Treasury Guidance on Partnership Cancellation and Deferral of Debt

ARLINGTON, Va., Oct. 6 /PRNewswire-USNewswire/ -- Partnerships' evaluation of cancellation of debt income (CODI) has always been challenging — and the addition of the Section 108(i) in 2009 made it even more complicated and potentially divisive among partners. Now the IRS has issued temporary regulations under Section 108(i) that provide some needed definitions and answers to many questions.  A new webinar from BNA, Section 108(i) — Application of 2010 Cancellation of Debt Regulations to Partnerships, led by McGladrey tax expert Harvey Coustan on October 12, deciphers the regulations and gives practitioners and partners the critical know-how they need today.  

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"Of the 15 pages of regulations issued, ten or so are devoted entirely to partnerships. The election is made at the entity level according to the statute, but the IRS and Treasury have worked hard in Rev. Proc. 2009-37 and in these regulations to work around the issues that a partnership-level election can raise," says BNA Managing Editor Allen Calhoun.

The presentation will cover:

• Background — Pre-legislative change — treatment of CODI
  • Exclusion of certain CODI
  • Attribute reduction required in some situations
• Legislative change
  • Elective 4- or-5-year deferral for CODI resulting from "reacquisition" of business debt
  • Acceleration of deferred amounts on happening of specified events
• Application to partnership debtors
  • Partnership election but with flexibility available that can enable each partner to determine the treatment of allocated CODI
  • Caution needed on part of general partner or managing member
  • Accompanying deferral of original issue discount deductions, distributions resulting from liability reduction, and "at risk amount"
  • Guidance provided on questions unique to partnership debtors
• Welcome guidance
  • Revenue Procedure 2009-37 issued August 17, 2009
  • Temporary regulations (TD 9498) issued August 11, 2010

About the Speaker

Harvey Coustan retired as a partner of Ernst & Young in 1998. While a member of that firm, at various times, he served as Partner In Charge of the National Tax Practice in Washington, DC, East Region Director of Tax, Partner in charge of Chicago Office tax practice, National Director of Tax Education, and Regional Director of Tax Practice and Procedure. Harvey presently consults on various tax and business matters, and provides expert witness testimony in technical tax and tax malpractice litigation. He has been a long-time consultant to McGladrey.

Section 108(i) Application of 2010 Cancellation of Debt Regulations to Partnerships will take place October 12, 2010, from 12:30 p.m. –  2:00 p.m., ET. To register for this webinar and obtain further information about CLE and CPE credits, go to http://www.bnatax.com/debt-regulations-partnerships-webinar/?open&cmpid=tmtxpr2010 or call 1-800-372-1033, menu Option 6, then Option 1. The per site fee is $249.

To receive automatic, email notification of upcoming BNA webinars that may be of interest to you, go to: http://www.bna.com/emailsignup.htm

About BNA Tax & Accounting Webinars

BNA Tax & Accounting is the foremost source of tax and accounting research, news, practice tools, and guidance for tax attorneys, CPAs, corporate tax managers, estate planners, and financial accountants.  Designed for today's busy practitioners, our webinars offer the same expertise and relevance that are the hallmark of all BNA Tax & Accounting resources. In just 60-90 minutes, practitioners gain in-depth knowledge on a current tax or accounting topic from experts in that area — and benefit from practical applications that can be put to work immediately. Conference attendees have the opportunity to ask the speakers questions, and may be eligible to earn CLE or CPE credits — all from the convenience of their own office or conference room.

SOURCE BNA Tax & Accounting