Large Partnerships

Wade Wilson, CPA

On May 1, 2012 Governer Deal signed into law, House Bill 965 changing the withholding requirements on nonresidents effective for tax years beginning on or after January 1, 2012.  Previously, Georgia allowed withholding on distributions paid or credited to partners who are nonresidents of Georgia (including nonresident alien partners).  The law has been modified so that withholding is now determined based on the partner's share on taxable income sourced to the state.  The withholding tax rate is still 4 percent.

IRS News Release

The IRS recently issued guidance regarding the electronic delivery of Schedules K-1 to recipient partners.  Many partnerships have been furnishing Schedule K-1s to their partners for years, and this newly issued Revenue Procedure now outlines the specific requirements of partnerships in furnishing this information electronically.

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Situation

A Real Estate Fund, which had invested in several properties in New York and California, was in the process of liquidating. The partnership consisted of approximately 4000 taxable and
tax-exempt partners. Because the Fund was liquidating, they needed high quality tax services, while facing cost reductions and staff shortages.