The Revised Debt-for-Equity Exchange Regulations: Compliance Challenges

Anticipating Issues in Valuations of Partnership Interests Received, Bad Debt Deductions, Interest-Ordering and More

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, November 1, 2012

Recorded event now available

or call 1-800-926-7926
Program Materials

This teleconference will prepare advisors to deal with the most challenging aspects of the finalized Sect. 108(e)(8) regulations on partnership debt-for-equity exchanges.

Description

Advisors to partnerships can expect tough decisions in determining the partnership- and partner-level federal tax consequences of debt-for-equity exchanges under the final Treasury and IRS regulations (TD 9557) on Sect. 108(e)(8).

Any number of practical compliance issues await with proper valuations of partnership interest received, applying Sect. 721, whether creditors get a bad debt deduction, interest-ordering and minimum gain chargeback rules, etc. Can partnerships now benefit by adjusting liquidation values of equity interest?

How can proper check-the-box decisions help avoid COD income? Where do things quickly get complicated in related-party acquisitions of debt? Lessons learned from nearly a year under the final regulations can help you anticipate and navigate these and other tough decisions.

Listen as our panel of experienced advisors explores the more difficult aspects that confront advisors dealing with the revised partnership debt-for-equity exchanges.

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Outline

  1. Final debt-to-equity rules under Sect. 108(e)(8)
    1. General rules
    2. Valuation of partnership interest received
    3. Application of Sect. 721
      1. Basis
      2. Holding period
    4. Bad debt deduction to the creditor
    5. Exception to Sect. 721 treatment
    6. Interest-ordering rules
  2. Practical strategies to consider
    1. Adjusting liquidation value
    2. Check-the-box
    3. Related-party acquisitions
    4. Others

Benefits

The panel will offer insights and alternatives for dealing with these and other more complex aspects of the regulations:

  • COD income of a partnership transferring an interest to a creditor.
  • Fair market value of a partnership interest transferred to a creditor.
  • Bad debt deductions to a creditor.
  • The interest-ordering rules.
  • Related-party acquisitions.

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

James Hamill
James Hamill
Tax Practice Director
Reynolds Hix & Co.

He has more than 30 years of tax experience and specializes in partnership and closely held business taxation. He is...  |  Read More

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