The Treasury Department on October 4 released guidance addressing disguised sales of property and the allocation of partnership liabilities. The regulations are wide ranging and come in final, temporary, and proposed forms. In the simplest terms, the regulations are concerned with tax deferral when a partnership sells assets or reorganizes.
Most notably, the regulations appear to target bottom-dollar guarantees (with exceptions for vertical slice guarantees), leveraged partnerships and deficit restoration obligations. The Treasury Department is concerned that certain transactions may lead to the inappropriate deferral of tax.
NMHC/NAA would be interested in any feedback members may have on these regulations.
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