Technical terminations of certain publicly traded partnerships.

• Position: News&trends

The IRS plans to issue guidance regarding technical terminations of a publicly traded partnership (PTP) resulting in multiple short tax years within one calendar year, which can cause considerable problems for taxpayers.

The issue arises when more than 50 percent of a PTP's capital and profits interest are sold or exchanged within a 12-month period, thereby resulting in a technical termination of the partnership under IRC Sec. 708(b).

For the calendar year in which it occurs, a technical termination results in the PTP having two...