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Property Contributions to Partnerships with Related Foreign Partners

Volume 3 No 6    /    Read Article

By Philip R. Hirschfeld and Nina Krauthamer

The Tax Section of the American Bar Association recently commented on a set of proposed rules that appear in Notice 2015-54. When adopted, these rules would limit the ability of U.S. persons to transfer appreciated property to a partnership in a tax-free transaction when the partnership has a non-U.S. person as a partner. The I.R.S. is concerned that through special allocations of gain, built-in appreciation in contributed assets may escape taxation. The Tax Section makes a case for additional guidance concerning the methods proposed to eliminate that result. Philip R. Hirschfeld and Nina Krauthamer discuss the I.R.S. proposal and A.B.A. comments.    See more →