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IRS Final Regulations Addressing Partnership Recourse Liability and Related Party Rules

A live 90-minute premium CLE/CPE video webinar with interactive Q&A

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Tuesday, March 11, 2025

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, February 14, 2025

or call 1-800-926-7926
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This CLE/CPE webinar will provide tax counsel and advisers with a thorough analysis of recently issued IRS final regulations addressing partnership recourse liability and related party rules. The panel will discuss key provisions of the final regulations and provide a practical guide to the challenges of allocating recourse and nonrecourse partnership debt, including a critical review of the rules and regulations under IRC Sections 704 and 752 in light of the final regulations.

Description

On Dec. 2, 2024, the IRS and Treasury released final regulations for partnership recourse liability, debt allocations, and third-party rules. Tax counsel and advisers must understand these final regulations and tax rules applicable to allocating partnership liabilities and their impact on tax basis and planning strategies.

A partner must calculate outside basis in various situations such as the receipt of a routine distribution of money, allocation of losses, redemption of an interest in a liquidation, or a sale of a partnership interest. Since recourse debt can increase a partner's loss deduction and allow for receipt of higher untaxed distributions, tax advisers must understand how to classify and allocate partnership liabilities.

The final regulations provide clarity in addressing how to allocate partnership liabilities and when a partner's obligation results in the economic risk of loss under Section 752. Notably, the final regulations modify core rules relating to recourse liabilities with a focus on disregarding constructive ownership rules applicable to partnership subsidiaries, the related partner exception, and when a person is related to more than one partner.

In light of these final regulations, practitioners will continue to struggle with reconciling allocations in partnership agreements with the requirement that the tax allocation has substantial economic effect under IRC Section 704(b).

Listen as our experienced panel provides a critical look at the final regulations, explains how to allocate partnership recourse and nonrecourse debt, and offers practical guidance on reviewing and structuring current partnership obligations.

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Outline

  1. Overview of Sections 704 and 752
  2. Final IRS regulations
  3. Recourse versus nonrecourse debts
  4. Allocation of liabilities
  5. Bottom-dollar guarantees
  6. Disguised sales
  7. Key considerations for partnership agreements

Benefits

This panel will review these and other important topics:

  • Key components of the final regulations on partnership recourse liability and related party rules
  • Distinguishing recourse from nonrecourse partnership debt
  • Application of debt allocation rules to everyday business transactions such as leveraged partnerships and asset drop-down transactions
  • Allocating liabilities between partners
  • Identifying disguised sales under the current tax law and final regulations
  • Key considerations for partnership agreements

Faculty

Altman, Daniel
Dr. Daniel Z. Altman
Partner
Sidley Austin

Dr. Altman represents clients with respect to all tax aspects of domestic and cross-border M&A and...  |  Read More

Additional faculty
to be announced.
Attend on March 11

Early Discount (through 02/14/25)

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Cannot Attend March 11?

Early Discount (through 02/14/25)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. CPE credit is not available on recordings. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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