By Megan L. Brackney
Journal of Passthrough Entities
January - February 2014 Edition
The reporting requirements for loss transactions can be confusing, particularly when dealing with passthrough entities, where individual partners or members may have different reporting requirements and the reporting of the individual partners or members may be different than that of the entity. Since the penalties for failure to properly report these transactions are severe for both the taxpayers and the advisors, it is important that these rules be applied with precision. This column discusses the loss category of reportable transactions, the IRS’s guidance for partnerships and partners reporting losses and the penalties for failure to disclose as required by Treasury Regulations.