Revenue Rulings 99-5 and 99-6: Tax Implications of Restructured Partnerships and LLCs

Revenue Rulings 99-5 and 99-6 are employed to facilitate entity restructuring, changes in partnership interests, and other acquisitions. Often, a single-member LLC will acquire a new member or members or a partnership, or one partner may acquire all other partnership interests. Revenue Ruling 99-5 covers the former, while 99-6 contains guidelines for the latter.

These revenue rulings explain the tax consequences with examples that include criteria for nonrecognition of the gain when property is contributed to a partnership, determining basis in a partnership interest, and relative holding periods. Partnerships that have in place or make a Section 754 election could receive a basis step-up due to restructuring. Revenue Rulings 99-5 and 99-6 aid in Section 1031 like-kind exchanges and S corporation F reorganizations. Invoking these guidelines can mitigate and defer income taxes payable by these entities and their owners.

Listen as our panel of federal income tax experts explains Revenue Rulings 99-5 and 99-6, including practical applications and real world examples to assist with partnership, LLC, and disregarded entity restructuring.

1. Understanding Rev. Rul. 99-5 and 99-6
2. When 99-5 or 99-6 Applies
   1. Converting a single-member LLC into a partnership
   2. Converting a partnership into a disregarded entity
3. Real world scenarios
4. Avoiding common pitfalls

The panel will cover these and other critical issues:

• Converting a single-member LLC into a partnership under Revenue Ruling 99-5
• Converting a partnership into a disregarded entity under Revenue Ruling 99-6
• How to ensure acquisition of partnership interests under Rev Rulings and 99-6 qualify for nonrecognition treatment of gains
• The tax implications of Revenue Rulings 99-5 and 99-6 on restructured partnerships
• Common real world scenarios utilizing Rev Rulings 99-5 and 99-6

Learning Objectives

After completing this course, you will be able to:

• Determine reporting considerations relative to Revenue Ruling 99-5 and 99-6 rearrangements
• Identify taxable income events resulting from restructuring a partnership
• Decide how Revenue Rulings 99-5 and 99-6 are applied when LLC ownership changes hands
• Ascertain core differences and applications of Revenue Rulings 99-5 and 99-6

• 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 or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.

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).