In August 2018, the U.S. Department of the Treasury issued final Regulations concerning the qualifications, designation, authority, and resignation of the required Partnership Representative under the new Centralized Partnership Audit Regime.[1] The rules are effective for tax years beginning after December 31, 2017 and apply to all partnerships and LLCs taxed as partnerships, although certain partnerships and LLCs may elect out of the regime to continue to be audited under the former rules. The option to elect out of the regime is limited to partnerships having 100 or fewer partners with individuals or corporate partners only (any partnership or LLC with a trust or a disregarded entity as a partner/member cannot elect out). Partnerships and LLC’s taxed as partnerships both will be referred to in this letter as “partnerships.”

Read more: Partnerships and LLCs Need to Revise Their Agreements to Address New Audit Procedures

Authors: Barbara Lawrence and Katy Donlan

At the end of 2017, the most significant federal tax legislation to take effect in over three decades was enacted. Federal guidance issued over the past year regarding that legislation and favorable state tax law changes have converged to make 2019 one of the most favorable wealth transfer tax planning environments on record.

Read more: Wealth Transfer Tax Planning in the New Year

In general, individuals who spend less than 183 days during the calendar year in Spain are considered Spanish Tax non-residents. Non-resident taxpayers in Spain are taxed on their income and assets from Spanish source only.

Therefore, Spanish Tax non-residents who own a property in Spain are subject to taxation and will have to file a tax return depending on the type of income obtained.

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On October 19, 2018, the Department of Treasury and Internal Revenue Service (“IRS”) issued initial proposed regulations,1 a Revenue Ruling,2 and draft Form 89963 and instructions for investments in qualified opportunity funds “QOF”). This long-anticipated guidance is expected to allow investors, business owners, real estate developers, and fund managers to be able to confidently seize the powerful tax deferral, reduction, and exclusion benefits provided by the QOF program.

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Commercial Rent Tax for Childcare

Proposition C—the Commercial Rent Tax for Childcare and Early Education—is set to take effect January 1, 2019, and increase the Gross Receipts Tax (“GRT”) on Commercial Rents.

The imposition of the Commercial Rent Tax is expected to be a significant increase to the local tax burden on commercial property owners in San Francisco. To that end, taxpayers’ advocacy groups have filed suit against the City and County of San Francisco seeking to invalidate the tax and claiming that Proposition C was passed in violation of the California Constitution.1 At issue is whether San Francisco voters can circumvent the requirement that Propositions that constitute a “special tax” must attain a two-thirds majority to pass as compared to the voter initiative process, which only requires a simple majority for approval. Last year, the California Supreme Court held in California Cannabis Coalition v. City of Upland that certain procedural standards applicable to measures proposed by legislators do not apply to measures proposed by voter initiative. The business organizations challenging Proposition C argue that the Upland decision did not go so far, as it did not address required voter threshold.

Read more: San Francisco Passes Proposition C to Increase Gross Receipts Tax on Commercial Landlords