What is the process for a gain recognized by a partnership?

Answers

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  Valerie Grunduski

  Plante & Moran, PLLC

  April 26, 2021

  If a partnership has a taxable gain that they elected to defer via investment in a QOF, the gain is not reported to its partners until 2026 or an inclusion event. Hopefully the partnership will provide information to its partners to allow them to properly prepare for this gain deferral event. There is no further action required of the partners. Alternatively, the partnership could flow the gain out to its partners and allow the partners the ability to individual invest in a QOF and elect to defer their share of gain.

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  Matthew Rappaport

  Falcon Rappaport & Berkman

  April 12, 2021

  The partnership would then be the taxpayer with the QOF interest, that's all. Form 8997 would be attached to the partnership's Form 1065 to report the QOF investment. Partnerships are eligible to defer capital gains into QOFs, or the deferral could occur at the partner level.

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  Maria De Los Angeles Rivera

  Kevane Grant Thornton

  May 07, 2021

  The partnership needs to make the investment in the specified period of 180 days and make the necessary elections with its tax return.

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