NYSBA Urges IRS to Give Up Look-Through Rule in Anti-Loss Regulations

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Proposed anti-loss importation rules under tax code Sections 362 and 334 represent a significant challenge for large partnerships and their corporate transferees, the New York State Bar Association Tax Section said in a letter and report sent to the Internal Revenue Service.
The March 14 report urged the IRS to consider whether applying the look-through rule is necessary with respect to widely held or publicly traded partnerships, particularly where the partnership holds a small percentage of stock of the transferee immediately after property is transferred, or where stock of the transferee represents a modest portion of the partnership's assets.
Instead, the NYSBA Tax Section said widely held or publicly traded partnerships should be allowed to use simplified methodologies to identify their partners and their tax status.