Bad Boy Guarantee Makes Loan Recourse?

By: Amanda Wilson

The IRS recently released IRS legal memorandum 201606027.  In this memorandum, the IRS considered the impact of a bad boy guarantee on allocating partnership liabilities under Section 752.  Traditionally, bad boy guarantees have not been viewed as resulting in a partnership liability being allocated to the guarantor, as the guarantee obligation has been viewed as subject to contingencies that make it unlikely that the guarantee would ever come into play. read more