The Treasury Department and the IRS finalized regulations that modify reporting requirements for sales or exchanges of certain interests in partnerships owning inventory or unrealized receivables.
The rules (TD 10048; RIN 1545-BR54) issued Tuesday finalize proposed regulations that were issued last August.
The regulations remove a rule finalized in November 2020 that requires a partnership to give a transferor partner information about an exchange to submit with their income tax return.
After the 2020 rule, the IRS had set a deadline of Jan. 31 of the following year to report the information. But Treasury and the IRS received comments that many partnerships couldn’t meet that deadline because they don’t have all the information required by that date. The new regulations give partnerships the option to report information about the exchange 30 days after the partnership has received a notice, if that’s later than Jan. 31.
The final regulations adopt the proposed regulations without change, Treasury and the IRS said. No public comments were received on the proposed regulations, and no public hearing was held, they said.
In November, the IRS revised the instructions for Form 8308, on which sales or exchanges of partnership interests are reported, to clarify the reporting requirements.
The regulations take effect Wednesday upon their publication in the Federal Register.
(Updates in paragraphs 4, 6, and 7 with more information from the regulations.)