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Tax Aspects of LLC Drafting: Target Allocations; Key Negotiated Tax Terms in JVAs; Top 10 Tax Mistakes When Drafting Agreements

Understanding the key tax aspects and negotiation points of partnership agreement drafting

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
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Conducted on Wednesday, July 12, 2023

Recorded event now available

or call 1-800-926-7926

This CLE/CPE course will provide tax counsel and advisers with the guidance necessary to correctly implement targeted partnership tax allocations. The panel will explain the complex requirements of IRC 704(b) and provide best practices for maximizing the tax benefits of targeting partnership allocations.

Description

LLC agreement drafting is a must learn topic for many. A key aspect in drafting is the allocation section that includes two alternative approaches. Targeted partnership tax allocations are a popular choice for allocating income and loss among partners. Tax counsel and advisers must guide clients on whether this method will capture all allowed benefits or whether layer cake allocations should be utilized. For example, target allocation agreements may not satisfy regulatory safe harbors but can still meet the economic effect equivalence test or the partners' interest in the partnership test.

Listen as our experienced panel guides you through the LLC drafting process including determining how both targeted and layer cake allocation provisions are drafted and implemented.

The panel will also address certain key points of negotiation when drafting tax provisions in partnership agreements. For example, tax practitioners place particular emphasis on 704(c) methodology, discretion over tax elections and decisions, audit determinations and tax return preparation.

Lastly, the panel will discuss certain common tax mistakes practitioners make when drafting partnership agreements. Examples include improperly drafting tax boilerplate, omitting important tax provisions, neglecting to address tax return deadlines and review rights and failures in tax audit language.

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Outline

  1. Targeted versus layer cake allocations
  2. Benefits and detriments of targeted allocations
  3. Tax allocation drafting best practices
  4. Key points of negotiation when drafting tax provisions
  5. 10 common drafting errors

Benefits

The panel will review these and other high priority issues:

  • When allocating income and loss among partners, what are the tax benefits of targeted versus layer cake partnership tax allocation methods?
  • What are best practices in drafting targeted allocation provisions?
  • Which tax provisions deserve special attention during drafting?
  • Which tax provisions are commonly overlooked or not properly drafted?

Faculty

Schneider, Steven
Steven R. Schneider
Partner
Stroock & Stroock & Lavan

Mr. Schneider leads the Baker & McKenzie passthroughs tax group and provides tax counsel for many national...  |  Read More

Snow, Mitchell
Mitchell Snow
Partner
Adler & Stachenfeld

Mr. Snow joined the firm in 2023 and is a partner in the Tax Practice. His work covers a range of tax transactions,...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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