Worthlessness Deduction for Partnership Interests
Ordinary vs. Capital Losses, Abandoned vs. Worthless, Recourse vs. Nonrecourse Debt
Recording of a 110-minute CPE webinar with Q&A
This webinar will take a comprehensive look at the worthlessness deduction for partnership interests (including LLCs taxed as partnerships). Our panel of esteemed federal taxation veterans will review the (rather limited) available authority, contrast the worthlessness deduction with abandonment, and discuss the impact of recourse and nonrecourse debt on the worthlessness deduction. They will also discuss IRC § 165(g), which primarily applies to stock and certain bonds that become worthless during the tax years.
Outline
- Introduction
- Worthlessness and Abandonment deduction outside of the partnership context, law and cases
- How worthless and abandonment deductions differ and what makes the worthlessness deduction unique
- Capital versus ordinary loss treatment
- Impact of Debt
- 165(g)
- Pilgrim’s Pride
- Worthlessness and Abandonment deduction within the partnership context, law cases, and rulings
- Echols
- MCM Investment Management LLC
- Rev. Rul. 93-80
- TAM 201929019 (which in part led to the New York Times article)
- Practical examples
- Conclusion
Benefits
The panel will review these and other critical issues:
- Distinguishing abandoning an investment and a worthless partnership investment
- Capital vs. ordinary loss treatment of investment losses
- The impact of case law on the worthless investment deduction
- Legislation needed to curb abuse of the worthlessness deduction
Faculty
Joseph C. Mandarino
Partner
Smith Gambrell & Russell
Mr. Mandarino's practice focuses on corporate, tax and finance law. He is involved with a wide variety of... | Read More
Mr. Mandarino's practice focuses on corporate, tax and finance law. He is involved with a wide variety of businesses and transactions, including experience with compliance, planning and M&A activities for partnerships, individuals and corporations. Mr. Mandarino’s practice also includes representation in tax controversy work. He writes and speaks extensively on a wide range of business, tax and finance topics.
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Walter D. Schwidetzky
Professor of Law
University of Baltimore
Professor Schwidetzky joined the faculty in 1985 and served as the director of the Graduate Tax Program from 1989 to... | Read More
Professor Schwidetzky joined the faculty in 1985 and served as the director of the Graduate Tax Program from 1989 to 2000. Prior to joining the faculty, he practiced law in Denver for six years, concentrating in tax and business law. He was also an adjunct professor at the University of Denver College of Law. Professor Schwidetzky's specialty is partnership taxation. He has authored or co-authored 3 books and has published over 35 articles in academic and professional journals. Unusually for a law professor, many of articles have been appeared in peer-reviewed journals. Several of his publications have been cited by United States Courts of Appeal and Federal District Courts, and one article was discussed in some detail in an 8th Circuit decision. In 2010 Professor Schwidetzky was made a member of the prestigious American Law Institute.
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