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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Law

Date & Time
  • event Date

    Tuesday, February 27, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$347.00
CLE
CPE
ALL

This CLE/CPE course will guide tax counsel and advisers on the current tax law's impact on the treatment of carried interest and available planning opportunities. The panel will discuss IRS regulations, the application of Sec. 1061, Sec. 1231 property, implications of related party transactions, and planning techniques to ensure favorable capital gains treatment.

Faculty

David M. Lehn
Partner
Withersworldwide

Mr. Lehn is a partner in the private client and tax team. He has extensive experience in federal and state income, estate and gift taxation. With his wide range of business and financial knowledge, clients look to him to apply his experience to structure complex business transactions and relationships and solve a variety of business-oriented problems while utilizing the benefits of trust, estate and tax planning. His clients include investors, entrepreneurs, senior level executives, family offices and fund managers and principals. His practice includes structuring investments and acquisitions, asset protection and preservation, and trust and estate planning.

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Richard S. Levine
Special Counsel
Withersworldwide

Mr. LeVine's practice focuses on cross-border estate, gift and income tax planning for owners of privately held companies and other high-net-worth U.S. and foreign individuals. He counsels clients on pre-immigration and pre-expatriation tax planning, offshore trusts and foundations deferred compensation planning for fund manager and structures involving life insurance. He has been heavily involved in advising clients on the IRS Voluntary Disclosure programs.

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Brian T. Lovett
Partner
Withum Smith + Brown, PC

Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses, including all aspects of tax compliance for partnerships and corporations. He advises clients with regard to the structure and tax consequences of new business ventures, and assists with restructuring existing businesses for increased tax efficiency. Prior to joining his firm, he was with a “Big 4” accounting firm, working closely with large, multinational real estate investment companies.

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Description

IRC 1061 increases the holding period required for long-term capital gains treatment from more than one year to more than three years. The impact of the three-year holding period could be burdensome to hedge funds, private equity, and real estate professionals.

There is controversy over carried interest because the tax rules allow hedge funds, private equity, and real estate professionals to pay taxes on carried interest at the capital gains tax rate instead of the higher tax rate applicable to ordinary income. In addition, IRC 1061 increases the required long-term capital gains holding period for an "applicable partnership interest" to more than three years. Therefore, advisers must be able to identify interests subject to IRC 1061 for tax planning purposes.

Tax counsel and advisers must also understand partnership interests that fall within the definition of profits interest under Rev. Proc. 93-27 or any exceptions, whether or not the partnership interest was issued in connection with the performance of substantial services in any applicable trade or business, and what partnership interests are not subject to IRC 1061. Also, advisers and counsel need to recognize any available planning mechanisms for avoiding the three-year holding period requirements to prevent unintended tax liability.

Listen as our panel discusses the requirements of IRC 1061, determining applicable partnership interest subject to the new holding requirements, key planning issues for 1231 property, and tax planning techniques to maintain favorable tax treatment of carried interest.

Outline

  1. Overview of the requirements for obtaining capital gains treatment under IRC 1061
  2. Impact of IRS final regulations
  3. Determining "applicable partnership interest" and "applicable trade or business"
  4. Applicability of IRC 1061 to 1231 property
  5. Planning ideas for avoiding IRC 1061 three-year holding period
  6. Best practices for compensation arrangements in light of new holding requirements under IRC 1061

Benefits

The panel will review these and other noteworthy issues:

  • Treatment of carried interest and performance of services under IRC 1061
  • Available tax planning techniques and strategies for partnerships for more favorable tax treatment
  • Determining partnership interest that is "applicable partnership interest" subject to IRC Section 1061 holding requirements
  • Understanding key planning issues regarding the applicability of IRC 1061 to 1231 property
  • Potential planning opportunities presented by special allocations, transfers to unrelated parties, capital contributions, and distributions
  • Best practices in ensuring favorable tax treatment in compensation arrangements involving carried interest

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Ascertain the treatment of carried interest and performance of services under IRC 1061
  • Determine partnership interests that constitute "applicable partnership interests" subject to IRC 1061 holding requirements
  • Identify planning opportunities presented by special allocations, transfers to unrelated parties, and capital contributions and distributions

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business, legal or public firm experience at mid-level within the organization, involved in sophisticated tax planning and reporting; supervisory authority over other attorneys/preparers/accountants. Knowledge and understanding of partnership and other pass-through entities, IRC 1061, 1231; familiarity with tax planning for hedge funds, private equity, and real estate professionals.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).