Partnerships don’t know when a partnership is considered terminated or continued after adjustments were made by the 2017 tax law, leading tax professionals to disagree on the interpretation.
The lack of clarity is causing collateral tax consequences for partnerships and their advisers who may be unintentionally terminating the partnership. The muddiness of Section 708 impacts partnerships’ elections and liability for adjustments.
There were two tax provisions that could cause a partnership to terminate: one was a technical termination and the other is “if no part of any business, financial operation, or venture of the partnership continues to be ...