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PTP units can be challenging assets to less of a legislative priority at this time.
give away due to the extensive report- Regardless of any proposals, congres- This article contains general information
ing requirements. These complexities sional legislation is required to enact a only and Deloitte is not, by means of this
may deter many taxpayers from gifting change in tax law. PTP investors should article, rendering accounting, business,
PTP units. be on the lookout for new developments financial, investment, legal, tax, or other
and reach out to their tax advisers for professional advice or services. This
Recent legislative proposals guidance if new tax legislation is enacted article is not a substitute for such profes-
Changes might lie ahead for PTP in- that includes a provision like that pro- sional advice or services, nor should it be
vestments. On March 28, 2022, Treasury posed in the Green Book. used as a basis for any decision or action
2
released its Green Book proposals to that may affect your business. Before
accompany the Biden administration’s A worthwhile investment? making any decision or taking any action
budget. Included in the Green Book was A PTP investment is a complex invest- that may affect your business, you should
a proposal to eliminate the corporate ment that may present opportunities consult a qualified professional adviser.
income tax exception for PTPs that to individual investors but requires tax Deloitte shall not be responsible for any
realize qualifying income or gains from planning to achieve an investor’s goals. loss sustained by any person who relies
fossil fuels beginning after Dec. 31, Holding the units of a PTP requires on this article.
2027. While no specifics related to the basis tracking and planning for passive
proposal are currently available, it would losses from the investment. The sale
presumably require PTPs with income of PTP units necessitates planning
or gains from fossil fuels to be taxed around the type and treatment of gain
as corporations, and thus the investor’s but presents investors the opportunity Contributors
reporting requirements would likely fol- to recognize suspended losses. Gifting
Laura Hinson, CPA (North Carolina),
low that of a public corporation versus units to a charitable organization may be
is a managing director, and Kathryn
a complicated PTP. However, the ideas desirable from a nontax perspective, but
Neely, CPA (Texas), is a tax senior
contained in the Green Book are only planning should be done to consider po-
manager, both with Deloitte Tax LLP.
proposals at this time. The recent Infla- tential gain recognition on donation and
3
tion Reduction Act notably did not the reporting requirements. If you make For more information about this article,
contact thetaxadviser@aicpa.org.
contain a similar provision to the Green careful choices and plan wisely, a basket
Book, so it appears this proposal may be of lemons may not be a bad thing. ■
2. Treasury Department, General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals.
3. P.L. 117-169.

AICPA RESOURCES

Articles CPE self-study
Drnevich and Sternburg, “Publicly Traded Partnerships: Tax Advanced Taxation LLCs & Partnerships — Tax Staff Essentials
Treatment of Investors,” 50 The Tax Adviser 276 (April 2019) Tax Fundamentals of LLCs and Partnerships — Tax Staff
Hagy, “Reporting Publicly Traded Partnership Sec. 751 Ordinary Essentials
Income and Other Challenges,” 49 The Tax Adviser 252 (April For more information or to make a purchase, visit
2018) aicpa.org/cpe-learning or call the Institute at 888-777-7077.
Webcast
Tax Fundamentals of LLCs and Partnerships,” Nov. 4, 9 a.m.–5
p.m. ET, or Dec. 7, 10 a.m.–6 p.m. ET
Tax Section materials (for members)
SALT Roadmap — State and Local Tax Guide
Schedule K-2 and K-3 resources

www.thetaxadviser.com October 2022 39