Gain on Sales of U.S. Partnership Interests by Foreign Partners After Grecian Magnesite v. Commissioner

Entity vs. Aggregate Approach to Determine if Gain is Effectively Connected U.S. Income

A live 90-minute CLE/CPE webinar with interactive Q&A


Tuesday, October 3, 2017 (in 11 days)
1:00pm-2:30pm EDT, 10:00am-11:30am PDT


This CLE webinar will provide tax counsel and advisers with a critical first look at the landmark Tax Court holding in Grecian Magnesite Mining v. Commissioner that certain gain realized by a foreign partner on the disposition of a U.S. partnership interest was neither U.S.-sourced nor effectively connected income (ECI) and was thus not taxable. The panel will discuss the import of Grecian Magnesite to foreign partners owning U.S. partnership interests, as well as to taxpayers who recognized taxable gain on prior dispositions.

Description

The Tax Court’s holding in July 2017 in Grecian Magnesite Mining, Industrial & Shipping v. Commissioner has the potential to dramatically change foreign investment in U.S. businesses structured as partnerships or LLCs. The Tax Court held a non-U.S. person’s gain from sale of its interest in a partnership engaged in a U.S. trade or business is not subject to U.S. income tax, except where required by a specific section of the Internal Revenue Code.

The court rejected the IRS 25-year position stated in Rev. Rul. 91-32, that gain realized by a non-U.S. partner on the disposition of a U.S. partnership interest engaged in a U.S. trade or business is ECI to the trade or business if a sale of the partnership’s underlying assets would cause ECI.

The court held whether such gain or loss would be U.S.-sourced as ECI would be determined using an “entity” approach, rather than the “aggregate” approach promulgated by the Service.

This holding has significant tax implications for non-U.S. partners in U.S. entities classified as partnerships. While the IRS may appeal this ruling or signal its non-acquiescence, foreign partners who have paid tax on gain from dispositions of U.S. partnership interests should consider filing claims for refunds before the statute of limitations expires.

Additionally, non-U.S. persons using blocker corporations may consider selling their equity rather than their share in the operating assets of the blocker.

Listen as our experienced panel provides a critical first look at the structuring and reporting impacts of the Grecian Magnesite holding on non-U.S. persons holding U.S. partnership interests.

Outline

  1. IRS position: Revenue Ruling 91-32: aggregate approach
  2. Tax Court holding in Grecian Magnesite: entity approach
  3. Remedial actions and tactics for non-U.S. partners paying tax on partnership sale gain
  4. Impact on existing partnership structures

Benefits

The panel will discuss these and other critical issues:

  • What actions should counsel advise a non-U.S. partner who paid tax on gain within the past three years from a sale of a U.S. partnership based on an aggregate approach to ECI determination?
  • What is the potential impact of Grecian Magnesite's entity approach on domestic and/or foreign blocker corporations investing in U.S. partnerships?
  • Which partnership structures will continue to require the aggregation approach to determining source and ECI of partnership sale gain amounts?
  • What should tax counsel consider for existing partnership structures in light of the Grecian Magnesite holding?

Learning Objectives

After completing this course, you will be able to:

  • Discern differing tax results between the IRS aggregate approach position and the Tax Court’s entity analysis
  • Recognize the impact on non-U.S. persons using foreign blocker corporations to hold U.S. partnership interests
  • Identify non-U.S. persons who may be adversely affected by the Grecian Magnesite approach
  • Determine steps tax counsel and advisers should take for both existing partnership structures and for non-U.S. persons who have reported taxable gain or loss from sale of U.S. partnership interests within the statute of limitations look-back period

Faculty

Brian J. O'Connor, Partner
Venable, Baltimore

Mr. O'Connor co-chairs the firm's Tax and Wealth Planning Group and provides tax advice to partnerships and to public and closely held businesses and their owners. Before coming to Venable, he worked as attorney-advisor with the IRS Office of Chief Counsel, assigned to projects and guidance involving partnerships and S corporations.

Friedemann Thomma, Partner
Venable, San Francisco & Los Angeles

Mr. Thomma is Chair of the Firm's International Tax Practice. He focuses on corporate international tax planning and U.S. taxation of foreign operations. He has managed large-scale global structuring projects, including the design, implementation, and post-implementation phases, for companies in various industries and jurisdictions. He has also served as the primary contact for multinational corporate clients, working closely with in-house tax, legal, treasury, and accounting departments to implement international legal and tax restructuring projects and post-M&A-integration projects.


Live Webinar

Live Webinar $297.00

Add a colleague on the same connection in the same room for only $97.00 in the shopping cart or by calling customer service.

This webinar is eligible for at least 1.5 general CLE credits.

CLE credits are not available for PR.

*In KS, OH, PA, for more than 1 attendee on the connection you must contact Strafford CLE via email or call 1-800-926-7926 ext. 35 prior to the program for special instructions.


CPE on Live Event

Continuing Professional Education credit processing is available for an additional fee per person. You may register for CPE credit processing at any time before or after the program. To qualify for CPE you may not listen via the telephone.

This program is eligible for 1.5 CPE credits.

  • 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 verification codes announced throughout the presentation.
  • Prerequisite: Three years+ business, law or public firm experience at mid-level within the organization, overseeing and structuring U.S. taxpayers' transactions involving foreign partnerships and vice versa; supervisory authority over other attorneys, preparers/accountants. Knowledge and understanding of tax recognition standards for U.S.-sourced and effectively connected income; familiarity with U.S. and foreign partnership structures.

NOTE: CPE credit processing for all attendees must be ordered by 2pm Eastern the day of the program to receive a Certificate of Attendance within 24 hours.


Recordings

CLE On-Demand - Streaming Video

Note: Self-study CPE and EA credits are not offered on this On-Demand webinar.

Includes recorded streaming video of full program plus PDF handouts.

On-demand is the only recorded format recognized for CLE credits in DE, IN, KS, LA, MS, NC, OH, OK, SC, TN, VA, WI.

AK, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, IN*, KS, KY, LA, ME, MN, MO, MT, NC, ND, NH**, NJ, NM, NV, NY, OH*, OK, OR, PA, SC, TN, TX, UT, VA, VT, WA, WI, WV, WY (Note: Some states restrict CLE eligibility based on the age of a program. Refer to our state CLE Map for additional information.)

*Only available for attorneys admitted for more than two years. For OH CLE credits, only programs recorded within the current calendar year are eligible - contact the CLE department for verification.

**NH attendees must self-determine if a program is eligible for credit and self-report their attendance.

CLE On-Demand Video $297.00
Available 48 hours after the live event

How does this work?


Recorded Event

Includes full event recording plus handouts (available after live webinar).

Note: Self-study CPE and EA credits are not offered on recorded events.

Strafford is an approved provider and self-study CLE credit is available in most states.

AK, AZ, CA, CO, CT, FL, GA, HI, IA, ID, IL, KY, ME, MN, MO, MT, ND, NJ, NM, NY, OR, PA, TN, TX, UT, VT, WA, WV, WY (Note: Some states restrict CLE eligibility based on the age of a program. Refer to our state CLE Map for additional information.)

Strafford will process CLE credit for one person on each recording.

Additional copies of a recording can be purchased at a discount. Please call Strafford Customer Service toll-free at 1-800-926-7926 ext 10 or email customerservice@straffordpub.com to place your order.

Recorded Webinar Download $297.00
Available 48 hours after the live event

How does this work?

Recorded Audio Download (MP3) $297.00
Available 24 hours after the live event

How does this work?

DVD (Slide Presentation with Audio) $297.00 plus $9.45 S&H
Available ten business days after the live event

How does this work?


Registration Plus Recorded Event

Best value!

Live Webinar & Webinar Download $394.00

Recorded Webinar Download Only $97.00 with Registration/Webinar Combo

Live Webinar & Audio Download $394.00

Recorded Audio Download (MP3) Only $97.00 with Registration/MP3 Combo

Live Webinar & DVD $394.00 plus $9.45 S&H

DVD (Slide Presentation with Audio) Only $97.00 with Registration/DVD Combo


NASBA CPE Sponsor

National Registry of CPE Sponsors

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 credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors 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).

or call 1-800-926-7926

Can't Attend the Live Program?

CLE Credits By State

See CLE State Map >

or call 1-800-926-7926

CPE Credit

Strafford is a NASBA CPE sponsor and our live webinars qualify for CPE credits. They offer you a high quality, cost effective, and convenient CPE option, with no lost travel time or expenses.

or call 1-800-926-7926

Customer Reviews

Strafford’s program provided useful planning tips.

Randall Gibson

Stoll Keenon Ogden

Very clearly presented and very practical advice.

Winthrop Rutherfurd, Jr.

White & Case

I was pleased with the in-depth, comprehensive coverage of a fairly narrow but important set of issues.

Patricia L. Chapman

Gleaves Swearingen

It was a very good presentation of complex material, managed in an understandable format. The information will be useful in my practice.

Jay H. McDowell

Withers Bergman

I like that the webinar was easy to access and offered good presenters and written materials.

Kathryn Spillers

Greenberg Glusker

or call 1-800-926-7926

Tax Law Advisory Board

Robert S. Barnett

Partner

Capell Barnett Matalon & Schoenfeld

William H. Byrnes

Associate Dean, Special Projects

Texas A&M University Law

Robert A.N. Cudd

Senior Partner

Polsinelli

Patrick Derdenger

Tax Partner

Steptoe & Johnson

Janice Eiseman

Principal

Cummings & Lockwood

Lynn Fowler

Partner

Kilpatrick Townsend & Stockton

Edward Froelich

Of Counsel

Morrison & Foerster

Daniel L. Gottfried

Partner

Hinckley Allen

J. Leigh Griffith

Partner and Practice Group Leader - Tax

Waller Lansden Dortch & Davis

L. Andrew Immerman

Partner

Alston & Bird

Mark S. Lange

Partner

BakerHostetler

Joseph C. Mandarino

Partner

Smith Gambrell & Russell

Lori Mathison

Partner, Cross-Border Transactions Tax

Fraser Milner Casgrain

Christian M. McBurney

Partner

Arent Fox

Suzanne Ross McDowell

Partner, Tax-Exempt Organizations

Steptoe & Johnson

Todd Reinstein

Partner, Corporate Tax and Due Diligence

Pepper Hamilton

Alex Sadler

Partner

Morgan Lewis

Susan Seabrook

Shareholder

Buchanan Ingersoll & Rooney

Peter Stathopoulos

Managing Director, State and Local Tax Practice

Bennett Thrasher

Eric Tresh

Partner & Co-Chair, State & Local Tax Practice

Sutherland Asbill & Brennan

Amanda Wilson

Shareholder

Lowndes Drosdick Doster Kantor & Reed

or call 1-800-926-7926

Our Guarantee

Strafford webinars are backed by our 100% Unconditional Money-Back Guarantee: if you are not satisfied with any of our products, simply let us know and get a full refund. For more information regarding complaints and refunds, please contact us at 1-800-926-7926 ext 10. Complaints regarding this program can be submitted via the course evaluation found in the “Thank you” e-mail at the end of the course.