Seminar  Seminar

Tax Planning for Domestic & Foreign Partnerships, LLCs, Joint Ventures & Other Strategic Alliances 2014


Why you should attend

Joint ventures between large companies or with start-up or other smaller companies are now an everyday occurrence. Partnerships have long been the tried and true form for the holding and operation of real estate, and since the 1981 Act, for the conduct of closely-held business operations as well. Further, the increase in the number of joint ventures to develop large-scale projects, the rise of the limited liability company, the promulgation of the “check-the-box” regulations, and the use of hybrids that have fueled an explosion of tax planning opportunities have led many companies, both large and small, to focus on the partnership form or the LLC form for structuring subsidiary operations and foreign operations. More than ever before, corporate tax executives find they must advise senior management, and outside counsel find they must advise their clients, on the opportunities and pitfalls of structuring joint ventures and investments as partnerships or LLCs under Subchapter K of the Internal Revenue Code.

This three-day seminar will trace the partnership tax rules from the birth of the partnership through its operating life, with an emphasis on tax issues and planning strategies and opportunities; and then, since for one reason or another such ventures frequently unwind either before or after satisfying their purpose, will focus on exit strategies and tax planning possibilities in unwinding. Some of the sessions on the first day are intended to serve as a review of basics. Special attention will be given to planning under recently finalized sets of regulations and proposed regulations, and to changes wrought by recent legislation and legislative proposals. Speakers from Treasury and the IRS will be joining a number of the more advanced panels in order to discuss cutting-edge issues.

What you will learn

  • The benefits and detriments of choosing the partnership form
  • Avoiding the partnership form for certain strategic alliances
  • Partnership interest basis issues, including allocation of liabilities
  • Determinations of partners’ distributive shares and the effect of liabilities
  • Drafting partnership agreement allocation and distribution provisions
  • Non-compensatory partnership options, convertibles, recapitalizations, and similar transactions, including a government panelist
  • Partnership and LLC compensatory interests including options, with a government panelist
  • The application of self-employment tax and the Net Investment Income tax to LLC members and limited partners, including a government panelist
  • Planning under Section 704(c)
  • Formation of partnerships, including joint ventures of operating businesses
  • “Topside” planning for private equity and hedge fund investments
  • Transactions between the partnership and partners, including exit strategies
  • Dispositions of partnership interests
  • Partnership distributions and terminations
  • Section 754 election planning and special basis adjustments
  • Partnership mergers and divisions
  • Special issues of tiered partnerships
  • Economic substance – understanding the limits; effects of codification; other judicial doctrines; partnership anti-abuse rules; recent tax shelter cases penalties; ethical considerations; distinguishing good from troublesome tax planning in today’s environment
  • Partnership workouts and debt restructurings
  • Panel on interesting partnership transactions of the past year
  • Session featuring IRS and Treasury representatives on the government perspective on key partnership issues
  • International joint venture issues and planning, including a government panelist
  • Effects of recent or proposed tax legislation and pending regulatory proposals

Plus New Sessions:

  • Tax Credit Partnerships
  • Advanced Section 752: Planning
  • Structuring Private and Publicly-Traded Partnerships in the Oil and Gas Industry

The faculty will consist of both inside and outside tax counsel with special expertise in the transactional aspects of structuring partnerships, joint ventures and other strategic alliances, both domestic and foreign. For some of the more advanced topics, the faculty will be joined by panelists from the IRS and Treasury. Many of the faculty have significant teaching experience and will adopt an approach designed to enable attendees to progress rapidly from an elementary understanding of the rules to the cutting edge of the most complex of current transactional issues.

Who should attend

Please plan to arrive with enough time to register before the conference begins. A networking breakfast will be available upon your arrival.

Day One: 9:00 a.m. - 6:00 p.m.

Morning Session: 9:00 a.m. - 12:15 p.m.

9:00 Partnership Interest Basis Issues Including Allocating Liabilities Among Partners

Relevance of basis in partnership interest; equality of inside and outside basis; Sections 705 and 752; partnership interest distinguished from partner’s capital account; effects of contributions; effects of liabilities; effects of Peracchi; effects of income and loss; effects of distributions; ordering and timing rules; allocation schemes for recourse and nonrecourse liabilities; bottom-dollar guarantees; capital account deficit restoration obligations; capital contribution obligations; final regulations for DREs; contingent liabilities and “Son of Boss” regulations; recent Notices.

Brian Knudson

10:00 Drafting Partnership Agreement Allocation and Distribution Provisions

Section 704(b); basic principles and relationship with Section 752; regulatory standards for allocations; substantial economic effect; deficit restoration obligations and other recourse assumptions; capital account maintenance; revaluations and book-ups; nonrecourse deductions and minimum gain attributable to nonrecourse liabilities; minimum gain chargebacks; partner nonrecourse debt; alternative test for economic effect; economic equivalence test; substantiality and related persons; PIP; ”targeted“ versus ”layercake“ allocations; at-risk and deficit restoration agreement; regulations on ”non-tax basis liabilities“; removal of the de minimis rule; joint ventures with tax-exempt investors; Series LLCs; planning strategies.

Todd D. Golub, David S. Raab

11:00 Networking Break

11:15 Implications of Section 704(c) for Negotiating a Partnership Agreement

Book/tax disparities; statutory framework; mechanics of Section 704(c) and reverse Section 704(c) allocations; final and proposed regulations; the traditional method; ceiling limitation principles; traditional method with curative allocations; remedial allocation method; other reasonable allocation methods; anti-abuse principles; Notice 2009-70; remedials and related parties; planning concepts.

Todd D. Golub, Beverly M. Katz

12:15 Lunch

Attendees will help themselves to a picnic lunch and then take their seats in the meeting room.

Afternoon Session: 12:45 p.m. - 6:00 p.m.

12:45 Partnership and LLC Compensatory Interests Including Options

Capital interests; profits interests; restricted versus unrestricted, Section 83(b) election; options; warrants; equity appreciation rights; consequences to all parties; gray areas; recent IRS releases; proposed regulations dealing with service partners; new focus on earned interests and possible “carried interest” legislation; effects of recent statutory amendments, proposed, temporary and new final regulations; Sections 409A and 457A.

Julie A. Divola, Paul F. Kugler, Clifford M. Warren [Special Counsel to the Associate Chief Counsel (Passthroughs & Special Industries), Internal Revenue Service]

2:00 Non-Compensatory Partnership Options, Convertibles, Recapitalizations, and Similar Transactions

Taxability of issuance, exercise and lapse of non-compensatory partnership options; definition of option, including options, warrants and conversion features of debt or preferred equity instruments; Section 704(b) and Section 704(c) consequences; basis issues; distinguishing compensatory from non-compensatory transactions; Section 708 and Section 752 impacts; proposed and final (hopefully) regulations; planning opportunities and strategies.

Brian Knudson, David R. Haglund (Invited) [Branch Chief, Office of the Associate Chief Counsel (Passthroughs & Special Industries), Internal Revenue Service]

2:45 Transactions Between Partner and Partnership – Sections 707, 704(c)(1)(B) and 737

Statutory and regulatory framework of Sections 707, 704(c)(1)(B), and 737; planning techniques based on current law, including discussion of recent high-profile cases and examples; overview of proposed regulations under Sections 707, 704(c)(1)(B), and 737; planning implications of proposed regulations.

Jennifer H. Alexander

4:00 Networking Break

4:15 “Topside” Planning for Private Equity and Hedge Fund Investments

Addressing topside planning for private equity and hedge fund investments, including the myriad passthrough, cross-border and other issues involved, including UBTI, ECI, FIRPTA, sovereign investors (Section 892), and exit planning.

David H. Schnabel, Eric B. Sloan, Lewis R. Steinberg

5:15 The Application of Self-Employment Tax and the Net Investment Income Tax to LLC Members and Limited Partners

Current state of the law on the application of the self-employment tax to LLC members and limited partners; impact of the new Medicare tax on net investment income, planning opportunities.

C. Wells Hall, III, Adrienne M. Mikolashek [Attorney, Branch 2, Office of the Associate Chief Counsel (Passthroughs & Special Industries), Internal Revenue Service]

6:00 Adjourn

Day Two: 9:00 a.m. - 6:00 p.m.

Morning Session: 9:00 a.m. - 12:30 p.m.

9:00 Sale, Exchange or Other Disposition of Partnership Interests; Partnership Distributions; Partnership Termination

Sections 741 and 751; unrealized receivables; inventory items; effect of liabilities; current distributions; distributions in complete liquidation of partner interest; post-distribution consequences to distributee; distributions involving partnership ordinary income property; partnership terminations and consequences; the Section 708 termination regulations, including planning strategies; planning to avoid termination.

Stephen D. Rose

10:15 Adjustments to the Basis of Partnership Assets (Sections 734, 743 and 754)

Transfer of partnership interest; distribution of partnership assets; distribution to transferee-partner; effect of Section 1060; effect of Section 197 and the final regulations; planning opportunities and techniques involving making or not making the Section 754 election; final regulations under Section 755; effects of 2004 AJCA amendments, including proposed regulations on mandatory adjustments for built-in losses and contributions of built-in loss property.

Andrew W. Needham, Dean S. Shulman, William P. Wasserman

11:15 Networking Break

11:30 Formation of Partnerships Including Joint Ventures of Operating Businesses

Treatment as partnership versus other arrangements; contributions of property, rights to use property and services; planning for transfers of intangibles under Section 197 in light of the final regulations, start-up costs, and deductibility of liabilities; contingent liabilities and trade or business exception to regulations; introduction to taxable transfers; partnership accounting methods, periods and issues; planning strategies.

Keith E. Villmow

12:30 Lunch

Attendees will help themselves to a picnic lunch and then take their seats in the meeting room.

Afternoon Session: 1:00 p.m. - 6:00 p.m.

1:00 Hot Topics: The Government Perspective

Recent and pending developments in partnership taxation featuring Treasury and IRS attorneys.

Curtis G. Wilson (Invited) [Associate Chief Counsel (Passthroughs & Special Industries), Internal Revenue Service], Craig A. Gerson (Invited) [Attorney Advisor (Office of Tax Legislative Counsel), Department of the Treasury], Clifford M. Warren [Special Counsel to the Associate Chief Counsel (Passthroughs & Special Industries), Internal Revenue Service], Stephen D. Rose, Eric B. Sloan

2:00 Interesting Transactions

A discussion of recent and pending transactions that have used the tax rules applicable to partnerships and other pass-through entities in new and innovative ways during the past year. The panel will discuss specific deals and new trends in flow-through entity structures and transactions.

Linda E. Carlisle, David B. Strong, Philip B. Wright

3:00 Partnership Mergers and Divisions

Final regulations; forms of partnership mergers; Assets-Over Form; Assets-Up Form; Interest-Over Form; effects under Section 752; buyout of a partner; merger or division as part of a larger transaction; forms of divisions; consequences under Sections 704(c)(1)(B) and 737.

Blake D. Rubin

3:45 Networking Break

NEW SESSION
4:00 Tax Credit Partnerships

Section 45 production tax credit (PTC) for wind, biomass, geothermal, and other renewable resources; Section 48 investment tax credit (ITC) for solar; election to claim ITC instead of PTC; structures, including partnership “flip” structure and pay-go variation, sale-leaseback and inverted lease; impact of historic rehabilitation tax credit guidance in the wake of Historic Boardwalk Hall; recent legislative and administrative changes, including the “begun construction” requirement and related IRS guidance; the use of MLPs, REITs and Yieldcos; Washington update, including corporate tax reform and proposed changes to depreciation, PTC and ITC.

Jeffrey G. Davis, Sean M. Shimamoto, Christopher T. Kelley [Attorney Advisor (Office of Tax Legislative Counsel), Department of the Treasury]

5:00 The Umbrellas of Subchapter K

An overview of the use of umbrella partnerships for UPREIT, UP-C and UP-PTP structures, including discussion of key features of such structures, terms of tax receivable agreements and tax protection agreements and tax issues raised by such structures and agreements.

Richard J. Bronstein, Katharine P. Moir

6:00 Adjourn

Day Three: 9:00 a.m. - 5:00 p.m.

Morning Session: 9:00 a.m. - 12:45 p.m.

9:00 Disregarded Entities: How Disregarded Are They?

This session will review recent developments in the tax treatment of disregarded entities in different contexts, and identify the themes and principles that lead to sometimes consistent, and sometimes inconsistent, results.

Stephen L. Gordon

9:45 Advanced and Cutting-Edge Topics in Subchapter K

This session will examine a range of issues arising in current transactional planning involving passthroughs, including intentionally taxable transactions, contingent liability structuring, and other cutting-edge strategies. 

Eric B. Sloan

10:45 Networking Break

11:00 Special Issues of Tiered Partnerships

Effects of tiering on Section 704(b) allocations, allocation of liabilities, mergers, Section 704(c) allocations, disposition of Section 704(c) property, special basis adjustments and other representative effects of tiered partnerships.

Nadine A. Holovach, Arielle S. Krause

11:45 Economic Substance, Judicial Doctrines and Ethics

The impact on partnership and other transactions of recent judicial decisions, legislation, and administrative developments relating to economic substance and tax shelters and the codification of the economic substance doctrine, including the 2011 LB&I Directive; laying the groundwork for penalty defenses; Circular 230 and related ethical considerations that come into play in evaluating the difference between good tax planning and overly aggressive or even criminal tax advice.

Edward M. Robbins, Jr., Steven R. Schneider

12:45 Lunch

Attendees will help themselves to a picnic lunch and then take their seats in the meeting room.

Afternoon Session: 1:15 p.m. - 5:00 p.m.

1:15 The Troubled Partnership - Workouts and Debt Restructurings

Distressed partnerships and the effect of debt modifications, debt workouts, and partnership bankruptcy proceedings on partners and creditors. Debt modification and amount and timing of cancellation of indebtedness (COD) income; differences between discharge/workouts of recourse and non-recourse indebtedness; effect of COD income recognized by a disregarded entity; allocation of COD income; strategies to mitigate the effects of COD income; disappearing debt in partnership transactions; passive activity and at-risk implications; Rev. Proc. 2009-37; partner-level deductions for worthlessness and abandonment; timing of losses for lenders; final regulations under Section 108(e)(8). 

Adam M. Handler, James M. Lowy, Bahar A. Schippel

NEW SESSION

2:15 Advanced Section 752: Planning

Building on the introduction to Section 752 (on Day One) and exploring the complexities arising from the Section 752 regulations and the perils and opportunities they create; recent transactions and cases in which the Section 752 regulations feature prominently.

Blake D. Rubin

3:00 Networking Break

NEW SESSION
3:15 Structuring Private and Publicly-Traded Partnerships in the Oil and Gas Industry

Treatment as a partnership versus other arrangements; the election out of subchapter K under Section 761; use of tax partnerships to solve oil and gas tax issues in contractual joint ventures; unique tax concepts in oil and gas partnerships; Section 613(A)(c)(7)(D); qualification as a publicly-traded partnership under Section 7704 with a focus on Section 7704(d) and “qualified income.”

John T. Bradford, Jordan H. Mintz

4:00 International Joint Venture Issues

General review of benefits/detriments in using U.S. or foreign tax partnership vs. corporate structure in outbound/inbound joint ventures; formation, operation and termination of joint venture; foreign tax credit; tax treaty and Subpart F and withholding tax issues; Section 894(c), foreign partnership reporting rules; foreign currency under Section 987, conversion issues and Rev. Ruls. 99-5 and 99-6; planning opportunities with hybrids, including check and sell.

James P. Fuller, Christopher Trump, Marjorie A. Rollinson [Deputy Associate Chief Counsel (International - Technical), Internal Revenue Service]

5:00 Adjourn

Co-Chair(s)
Stephen D. Rose ~ Munger, Tolles & Olson LLP
Eric B. Sloan ~ Principal, Deloitte Tax LLP
Clifford M. Warren ~ Special Counsel to the Associate Chief Counsel (Passthroughs and Special Industries), Internal Revenue Service
Speaker(s)
Jennifer H. Alexander ~ Deloitte Tax LLP
John T. Bradford ~ Liskow & Lewis
Richard J. Bronstein ~ Paul, Weiss, Rifkind, Wharton & Garrison LLP
Linda E. Carlisle ~ Miller & Chevalier Chartered
Jeffrey G. Davis ~ Mayer Brown LLP
Julie A. Divola ~ Pillsbury Winthrop Shaw Pittman LLP
James P. Fuller ~ Fenwick & West LLP
Craig A. Gerson(invited) ~ Attorney Advisor, Office of Tax Legislative Counsel, U.S. Department of the Treasury
Stephen L. Gordon ~ Cravath, Swaine & Moore LLP
David R. Haglund(invited) ~ Branch Chief; Office of the Associate Chief Counsel (Passthroughs & Special Industries), Internal Revenue Service
C. Wells Hall, III ~ Nelson Mullins Riley & Scarborough LLP
Beverly M. Katz ~ KPMG LLP
Christopher T. Kelley ~ Attorney Advisor; Office of Tax Legislative Counsel, U.S. Department of the Treasury
Arielle S. Krause ~ Vice President & Tax Counsel, GE Energy Financial Serivces
Paul F. Kugler ~ Director, Washington National Tax, KPMG LLP
Adrienne M. Mikolashek ~ Attorney, Branch 2; Office of the Associate Chief Counsel (Passthroughs and Special Industries), Internal Revenue Service
Jordan H. Mintz ~ Vice President & Chief Tax Officer, Kinder Morgan, Inc.
Katharine P. Moir ~ Simpson Thacher & Bartlett LLP
Andrew W. Needham ~ Cravath, Swaine & Moore LLP
David S. Raab ~ Latham & Watkins LLP
Edward M. Robbins, Jr. ~ Hochman, Salkin, Rettig, Toscher & Perez, P.C.
Marjorie A. Rollinson(invited) ~ Deputy Associate Chief Counsel (International - Technical), Internal Revenue Service
Blake D. Rubin ~ McDermott Will & Emery LLP
Bahar A. Schippel ~ Snell & Wilmer L.L.P.
David H. Schnabel ~ Debevoise & Plimpton LLP
Steven R. Schneider ~ Goulston & Storrs PC
Sean Shimamoto ~ Skadden, Arps, Slate, Meagher & Flom LLP
Dean S. Shulman ~ Kirkland & Ellis LLP
Lewis R. Steinberg ~ Managing Director, Head of Strategic Advisory Investment Banking Department, Credit Suisse Securities (USA) LLC
David B. Strong ~ Morrison & Foerster LLP
Christopher Trump ~ Deloitte Tax LLP
Keith E. Villmow ~ Kirkland & Ellis LLP
William P. Wasserman ~ Law Offices of William P. Waserman
Curtis G. Wilson ~ Associate Chief Counsel (Passthroughs and Special Industries), Internal Revenue Service
Philip B. Wright ~ Bryan Cave LLP
Program Attorney(s)
Stacey L. Greenblatt ~ Practising Law Institute

San Francisco Seminar Location

PLI California Center, 685 Market Street, San Francisco, California 94105. (415) 498-2800

San Francisco Hotel Accommodations

The Palace Hotel, 2 New Montgomery Street, San Francisco, California 94105. Call (800) 917-7456 seven days a week from 6:00 am to 12:00 am (PDT) and mention you are attending this program at Practising Law Institute to receive the preferred rate. For online reservations, go to www.sfpalace.com/pli to receive the preferred rate.

Westin San Francisco Market Street, 50 Third Street, San Francisco, CA 94103
Reservations can be made by calling 415-974-6400.  Ask for the corporate reservation coordinator and reference 287179.  You can also book online at westin.com/marketstreet and enter the above number.

Due to high demand we recommend reserving hotel rooms as early as possible.

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Item# 51217
Location:  San Francisco, CA
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