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H3835-Tax Shelters §6011
Disclosure obligations under the §6011 reportable transaction rules for taxpayers claiming multiple §165 losses in a single tax year are examined by the Chief Counsel's Office.
The Chief Counsel's Office explained the operation of dollar-value thresholds triggering disclosure requirements for partnerships and their corporate and individual partners claiming such losses, and outlined content required for the disclosures on Form 8886, Reportable Transaction Disclosure Statement, rejecting as incomplete certain protective filings.
Under the §601 1 regulations, the Chief Counsel's Office said, every taxpayer that has participated in a "reportable transaction" and who is required to file a tax return must timely file a disclosure statement in the form prescribed by Regs. §1.6011-4(d). Under the regulations, a reportable loss transaction is any transaction resulting in the taxpayer claiming a loss under § 165 of at least:
* $10 million in any single tax year, or $20 million in any combination of tax years, for corporations;
* $10 million in any single year, or $20 million in any combination, for partnerships that have only corporations as partners- looking through any partners that are themselves partnerships- regardless of whether any losses flow through to one or more partners;
* $2 million in any year, or $4 million in any combination, for all other partnerships, regardless of whether any losses flow through to one or more partners;
* $2 million in any single year, or $4 million in any combination, for individuals, S corporations, or trusts, regardless of whether any losses flow through to one or more shareholders or beneficiaries; or
* $50,000 in any single taxable year for individuals or trusts, regardless of whether the loss flows through from an S corporation or partnership, if the loss arises with respect to a §988 foreign currency transaction.
Unrelated Losses Not Aggregated. In the first situation considered, the taxpayer is a partnership with two corporate partners, each with a 50% interest,...