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ARTICLE · 16 JULY 2012

Partnership Bankruptcy Tax Issues

Hogan Lovells Cadwalader
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Bankruptcies and restructurings involving partners and partnerships raise a number of unique tax issues.

United StatesInsolvency/Bankruptcy/Re-Structuring
Linda Swartz
Linda Swartz
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I. INTRODUCTION

Bankruptcies and restructurings involving partners and partnerships1 raise a number of unique tax issues. While the Internal Revenue Service (the "IRS") has provided guidance with respect to a number of these issues, a surprising number of unresolved issues remain. The first part of this outline summarizes the state of the law with respect to general tax issues that typically arise in connection with partner and partnership bankruptcies and restructurings. The balance of the outline discusses tax issues that arise under Subchapter K when troubled partnerships are reorganized.

II. GENERAL ISSUES

A. Individual Partner Debtors and Their Estates

1. Creation of New Entity

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