IRS releases guidance on withholding on transfers of non-publicly traded partnership interests

Tax Hot Topics newsletter The IRS provided guidance on April 2 in Notice 2018-29 on the withholding requirements associated with certain transfers of non-publicly traded partnership interests enacted by the Tax Cuts and Jobs Act. The notice includes rules and procedures relating to qualifications for exemptions from withholding or reductions in the amount of withholding under Section 1446(f). The notice also includes interim guidance designed to allow for the effective and orderly implementation of the statute.

The new guidance follows Notice 2018-08, which temporarily suspended certain withholding obligations enacted under new Section 1446(f). The suspension under Notice 2018-08 applies only to dispositions of interests in publicly traded partnerships and does not extend to non-publicly traded partnership interests. Notice 2018-08 continues to apply to publicly traded partnerships, as the rules in Notice 2018-29 do not apply to the transfer of a publicly traded partnership.

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Grace Kim
Principal, Partnership Tax Technical Leader
Washington National Tax Office
T +1 202 521 1590

Jose Carrasco
Senior Manager, National Tax Standards Group
Washington National Tax Office
T +1 202 521 1552

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