August 17, 2019

CLE: Proposed IRS Rules on Series LLCs and Series Statutory Trusts

A number of domestic jurisdictions (Delaware, Connecticut, Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, Utah, Virginia, Wyoming, and Puerto Rico) have enacted statutes providing for the creation of entities that may establish series, including limited liability companies (series LLCs) and business or statutory trusts (series statutory trusts).

In general, statutes provide that a limited liability company or statutory trust may establish separate series. A series has “associated” with its specified owners, assets, rights, obligations, and investment objectives or business purposes. The interests of the owners associated with a series are comparable to ownership of the series. Generally, the debts, liabilities, and obligations of one series generally are enforceable only against the assets of that series and not against assets of other series or of the series LLC or series statutory trust.

Under current law, there is little specific guidance regarding whether for Federal tax purposes a series is treated as an entity separate from other series or the series LLC or series statutory trust, as the case may be, or whether the company or trust and all of its series should be treated as a single entity.

On September 14, 2010, the IRS issued proposed rules (.pdf) regarding Series LLCs and Series Statutory Trusts generally treating series as separate entities for Federal tax purposes if they are established under a statute with provisions similar to the series LLC or series statutory trust statutes currently in effect in several states. The proposed regulations, however, leave some questions unanswered.

These questions will be explored in an upcoming CLE program taught by attorneys John DeBruyn, Robert Keatinge, Herrick Lidstone, Allen Sparkman, Tony van Westrum, and Tom Yearout:

Friday, October 8, 2010
Attend LIVE or via live WEBCAST

8:00 – 8:30 am Registration (Continental Breakfast provided)
8:30 – 9:30 am The Series Concept and Tax Ramifications: What is a Series and How Do They Work?

  • Classification of a Series that is Treated as a Separate Entity for Federal Tax Purposes
  • Entity Status of Series Organizations
  • Continuing Applicability of Tax Law Authority to Series
  • Effect of Local Law Classification on Tax Collection
  • Employment Tax and Employee Benefits Issues
  • Statement Containing Identifying Information about Series
9:30 – 10:30 am Where do we go from here? Should Colorado enact “Series LLC” or “Series Statutory Trust” provisions?
10:30 am Adjourn
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