Simplified Reporting for Partnership Hot Asset Sales

When there is a sale or exchange of a partnership interest owning hot assets—unrealized receivables or inventory items—the partnership must report this transaction on Form 8303 (gain on such assets is ordinary income). Current rules require the partnership to file Form 8308 by January 31 of the year following the year of the transaction. Proposed regulations would simplify reporting by allowing information about the transaction to be included on Schedule K-1, with Form 8303 attached. Partnerships may rely on the proposed regs for exchanges occurring on or after January 1, 2025. Wow! How often does the burden of reporting to the IRS get simplified? #IdeaoftheDay

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