IRS Book-Tax Guidance Provides More Leeway for Partnerships

New Treasury Department and IRS guidance will provide much-desired flexibility for partnerships and their partners to determine how much of their income is subject to the corporate book-income tax, practitioners and other observers said.

The guidance, issued in an IRS notice Tuesday, allows partnerships and partners to choose from among multiple methods to calculate how much of a partner’s income from a partnership goes into calculating the corporate alternative minimum tax. Many taxpayers and their advocates had complained that the single, mandatory method that the agencies had proposed would have been too complex and burdensome.

The alternative methods may require ...