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IRS Rules Support Aggregate Treatment for Partnerships (1)

Jan. 24, 2022, 6:06 PMUpdated: Jan. 24, 2022, 11:08 PM

An IRS shift toward treating partnerships as aggregates of their individual partners could create compliance challenges for the partners, tax practitioners said Monday.

The IRS made the shift clear in two sets of rules it issued Monday addressing domestic partnerships’ holdings in different types of foreign companies. It confirmed and moved further toward the “aggregate” approach, in which partners are deemed to own the assets, rather than have the partnership considered as an entity separate from them. That means the partners count their shares of the partnership’s foreign income in their own gross incomes.

But the shift means that ...