2024 Tax Season: Updates & Reminders For Alternative Investment Group Clients

With the 2024 filing season upon us, it is crucial for taxpayers and professionals alike to stay informed about the latest changes and updates affecting the 2024 tax year. This article highlights some of the most significant changes and updates that may affect fund investors and managers and provides an overview to help navigate the upcoming tax season.

Form 8308, Report of a Sale or Exchange of Certain Partnership Interests

The IRS released a revised Form 8308 that will be used to report transfers occurring on or after Jan. 1, 2023. The reporting requirements were expanded to include the record holder of the partnership interest immediately before transferring the interest and the beneficial owner. Two additional parts were also included,

When the revisions were initially made, the IRS provided relief from penalties for failures to furnish correct payee statements solely for a failure to furnish Part IV of Form 8308 (pertaining to unrealized receivables or inventory items described in section 751(a)) by the due date for the calendar year 2023. To qualify for the relief, partnerships needed to do the following:

The relief is provided because partnerships seldom have all of the information required for Part IV available by Jan. 31. Because that is still a reality, relief was also provided for reporting Part IV on Form 8308 for the calendar year 2024 through Notice 2025-02, which extends relief similar to Notice 2024-19 for 2023.

Form 15620, Standardization of Section 83(b) Election

The IRS released Form 15620, a new optional form taxpayers can use to make a Section 83(b) election. Previously, the IRS had not provided any official form for making the written statement required under Section 83(b). Instead, filers could follow the disclosure requirements under regulations section 1.83-2(e) or utilize a sample election statement under Rev. Proc. 2012-29.

Section 83(b) allows an employee or independent contractor to elect to include in their current gross income the excess fair market value of substantially nonvested property transferred as compensation for the performance of services over the amount paid (if any) at the time of transfer, rather than when the property becomes substantially vested. The election must be made no later than 30 days after the property is transferred, and a copy of the election must be provided to the employer that transferred the property. Form 15620 is not required to make the election, and taxpayers may continue to use the sample statement provided in Rev. Proc. 2012-29 or any other statement that includes all the information required under the regulations.

Form 15620 also newly requires that the service recipient sign “under penalty of perjury” with a declaration that to the best of their knowledge and belief, the information entered on Form 15620 is true, correct, complete and made in good faith. Lastly, Form 15620 must be filed via mail to the IRS office with which the person making the election files their income tax return.

Although Form 15620 may accommodate greater certainty of the election and eventual electronic filing capabilities, the two new items could decrease its desirability in the near term.

Form 7217, Partner’s Report of Property Distributed by a Partnership

The IRS also recently released Form 7217 along with instructions. This new form is used to report the basis of property distributed from a partnership to a partner in a liquidating or non-liquidating distribution, including any basis adjustments required by the partner under Section 732(a)(2) or 732(b).

Form 7217 is not needed if:

Form 7217 is filed as a separate form with the taxpayer’s tax return in the year they received a property distribution subject to section 732 and is due when the partner’s tax return is due, including any extensions. The following information is requested by Form 7217:

1. Name and TIN of the partner

2. Distributing partnership’s name and EIN

3. Date property was distributed to partner

4. Indication whether the distribution was in complete liquidation of the partner’s interest in the partnership

5. Indication whether the distribution was treated as a sale or exchange under section 751(b)

6. Total partnership’s aggregate basis in distributed property (taking into account any basis adjustments under sections section 732(d), section 732(f), or section 734(b)) immediately before the distribution)

7. Adjusted basis of the partner’s interest in the partnership immediately before the distribution

8. Cash received in the distribution

9. Fair market value of marketable securities (as defined in 731(c)) received in the distribution

10. Gain recognized on the distribution

11. Indication of whether U.S. tax is required to be paid on the gain

12. Partner’s basis in partnership interest reduced by cash received in distribution

13. Total aggregate basis to be allocated to the distributed property

14. Description of the property distributed

Important Due Dates:

March 17, 2025:

April 16, 2025:

June 15, 2025:

In Conclusion

Each tax year, there are many updates to filing requirements and deadlines for taxpayers to consider. The information above can be complicated to understand and track. You should consider consulting with your CBIZ tax professional to discuss tax planning opportunities and filing requirements that may be an issue for you. Connect with us today to learn more.