• Recent Legislation will Require Changes to Most Partnership and Operating Agreements
  • August 5, 2016 | Author: Michael S. McGowan
  • Law Firm: Shumaker, Loop & Kendrick, LLP - Toledo Office
  • The Bipartisan Budget Act of 2015 (the “Act”) replaced the existing partnership audit rules with a dramatically different set of rules that will be applicable to the first partnership tax year beginning after 2017. For calendar year partnerships, these rules will be effective for the 2018 tax year. The new rules are complicated and have numerous exceptions and special rules. The purpose of this article is to highlight the major changes and the impact of those changes on transactions with partnerships occurring before the rules become effective. Many partnerships will find it helpful to amend their partnership agreements well in advance of 2018. All references in this article to partnerships include limited liability companies that are taxed as partnerships and all references to the partnership agreement also apply to the operating agreement of a limited liability company.