By: Matt O’Kane
Here’s how the recent legislative changes will affect you:
Spousal Homestead Transfer
Two Legislative Changes to Pay Attention to
New Partnership Audit Rules Heading Our Way?
By: Amanda Wilson
The budget bill introduced yesterday includes a proposal to revamp/streamline how partnerships are audited. Specifically, it would repeal the much maligned TEFRA (1982 Tax Equity and Fiscal Responsibility Act) rules.
The overall effect would mainly be that the electing large partnership rules would apply to most partnerships, including partnerships with a trust or pass-through entity as a partner. It also gets rid of the tax matters partner (a position that can only go to a partner), and provides for a partnership representative that may be either a partner or non-partner. This representative would be designated by the partnership with the sole authority to act on behalf of the partnership for partnership audit and judicial proceedings. Finally, the statute of limitations would only look at the time that the partnership return was filed and any extensions granted by the partnership, rather than the partners’ individual statutes of limitations (doing away with the Rhone-Poulenc problem).
Stay tuned for further developments!
New Florida LLC Act – Foreclosure Still a Possibility on Interests in Single-Member LLC’s
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The Florida legislature has passed a bill that completely revises the Florida Limited Liability Company Act. It is now awaiting the governor’s signature. The new act keeps the provision added to the Florida Limited Liability Company Act last year as a result of the Olmstead case. That provision allows a judgment creditor to foreclose on the interest of a member in a single-member LLC, but also specifically limits the remedy of a judgment creditor of a member of a multiple-member Florida LLC to a charging order. Therefore, you should continue to consider using an LLC formed in Delaware (or any other state that limits a judgment creditor’s remedy to a charging order for both multiple-member and single-member LLC’s) for any single-member LLC that owns real estate or other valuable investment property. On the other hand, a Florida LLC remains a good choice for a multi-member LLC that will own investment property.