KPMG notes that the IRS has released FAQs as reporting guidance for “carried interests.” It’s summary is as follows:
The IRS today released a set of “frequently asked questions” (FAQs) providing detailed reporting directions for certain passthrough entities and taxpayers reporting partnership interests held in connection with the performance of services—often referred to as “carried interests.”
Read the FAQs (posted November 3, 2021)
According to a related IRS release—IR-2021-215—the FAQs contain:
• Sample worksheets that certain passthrough entities and taxpayers may be required to use in reporting “carried interests” for tax returns filed after December 31, 2021, in which a passthrough entity applies the final regulations
• Additional instructions for certain passthrough entities and taxpayers who, though not required to file the sample worksheets, must provide similar information and must disclose whether the information was determined under the proposed regulations or another method for tax returns filed after December 31, 2021, for a tax year beginning before January 19, 2021
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.