Dissolution 1000

IRS Program on Dissolution of Businesses and Marriages

On September 13th, Robert E. McKenzie participated in an IRS panel on the dissolution of business partnerships and marriages.

Topics discussed:

Introduction

  • Hazards to preparer similar in business breakup and marriage breakup
  • Circular 230 provision

Divorce

  • Change in filing status
    • When does change take effect
    • Annulment vs. divorce
  • Relief from joint liability (Form 8857)
    • Innocent spouse
    • Separation of liability
  • Protecting an ex-spouse’s share of refund (Form 8379)

Ending a Partnership

  • Dissolution vs. termination
  • When is partnership terminated?
  • Common Issues
    • Sale of partnership interest by partner
    • Partnership allocations/loss limitations
    • Gain/loss from distributions
  • Redemption of partnership interest by partnership
  • Liquidation of withdrawing or deceased partner’s interest
  • Abandonment of partnership Interest

The Ethics Involved

  • Your obligations to the individual partners
  • Whom can (or should) you keep as clients?