By: Amanda Wilson
I'm at the ABA Tax conference this week and one of this morning's first panels included a discussion of hot topics in partnerships.
Curtis Wilson, IRS Associate Chief Counsel in Passthroughs and Special Industries, discussed the status of the IRS's guidance project on targeted capital accounts for partnerships. He stated that the IRS has not yet done a lot of work on the project, and did not even know what form the guidance would take (i.e., notice, proposed regulations, etc.). He did indicate that the guidance is likely going to cover situations where the capital accounts do not govern liquidations. This would be where liquidating distributions are pursuant to the normal cash distribution provisions, rather than the situation where liquidating distributions are in accordance with capital accounts but capital accounts are designed to equal the amount that would be received on liquidation if the normal cash distribution provisions applied.