A member in an electing large LLC may not report any entity-level item inconsistently with the LLC return, even if the member notifies the Service of the inconsistent treatment.
The Service determines the treatment of all LLC items at the entity level during the audit of an electing large LLC.
If the tax burden is not reasonably allocated, the preamble to the final regulations suggest that gifts may be deemed to have been made to the extent that the electing trust or related estate pays a disproportionately larger share of the income tax.
It would seem that a gift tax consequence could only arise if the beneficiaries of the electing trust and related estate are not the same persons.
In another case, (30) two of the shareholders of a corporation electing
S status transferred their interests to a partnership, an ineligible shareholder.
Shares: $1,005 in cash for each share of each cash electing
Any current-year transfer (or any or all current-year transfers) by the electing
taxpayer to the trust; 2.
out of the deemed allocation rules does not prevent a transferor from allocating his or her available GST exemption, such as when making a partial allocation on a timely filed Form 709 or by making a late allocation under Regs.
In addition, split gifts made by a spouse are now reported separately on Part 1, Gifts Subject Only to Gift Tax; Part 2, Direct Skips; or Part 3, whichever is applicable, to facilitate electing
out of the deemed-allocation rules on split gifts that are direct skips or indirect-skip transfers.
The net effect of electing
to amortize the market discount for tax-exempt bonds is that the taxpayer can treat the entire gain as a capital transaction (as opposed to a mixture of capital gain or loss and ordinary income).
Because of the many newly created or converted S corporations, many letter rulings, notices, proposed regulations and revenue procedures reflected the 1996 legislative changes regarding qualified subchapter S subsidiaries (QSSSs), qualified subchapter S trusts (QSSTs) and electing
small business trusts (ESBTs); in addition, Rev.
The Sixth Circuit reversed, holding that the date for determining whether a power of appointment exists is the date of electing
to recalculate life expectancy, the payout will be slower during the life of the participant and/or beneficiary.
In certain circumstances, a taxpayer that is not a tax shelter can avoid the restrictive economic performance test in determining the timing of a deduction by electing
the recurring item exception.