Tax BriefTax Brief Issue 5: Retroactive Partnership Basis; Surviving Spouse IRA Rollover Clarity
Two IRS private letter rulings this week - retroactive basis adjustments under late §754 relief, and a narrow spousal IRA rollover via trust structure.
This week brings crucial updates on Q3 interest rates, ACA employer mandates, partnership information reporting changes, and retirement plan RMD rules.
01. Q3 Interest Rates; ACA Mandate Payments
- For the calendar quarter beginning July 1, 2026, the interest rate for tax underpayments and non-corporate overpayments is 7%, for corporate overpayments it is 6% (or 4.5% for amounts over $10,000), and for large corporate underpayments it is 9%.
- For plan years beginning after December 31, 2026, the adjusted employer shared responsibility payment under § 4980H(c)(1) is $3,780 and under § 4980H(b)(1) is $5,670, both per-employee amounts used in the penalty calculation rather than flat employer charges.
Source: IRS Internal Revenue Bulletin · 2026-05-26
02. Partnership 751(a) Reporting; New RMD Age
- Final regulations for Section 751(a) partnership interest exchanges remove the January 31 deadline only for the Form 8308 Part IV computational information, allowing it until the partnership's tax return due date for tax years ending on or after May 20, 2026; the basic Form 8308 statement (Parts I-III) must still be furnished by January 31.
- The Required Minimum Distribution (RMD) age for employees born on or after January 1, 1951, and before January 1, 1960, increased from 72 to 73 under SECURE 2.0 Act Section 107 (rising to 75 for those born on or after January 1, 1960), with related final regulations applying for calendar years beginning on or after January 1, 2025.
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Source: IRS Internal Revenue Bulletin · 2026-06-01
03. Extension for Missed GST Exemption Election
- The IRS may grant extensions to elect out of automatic Generation-Skipping Transfer (GST) exemption allocation under IRC 2632(c)(5) if a taxpayer demonstrates reasonable action and good faith, including reasonable reliance on a tax professional's advice, and the grant of relief does not prejudice the interests of the government.
- Extensions for missed GST exemption allocation elections allow taxpayers to file amended Forms 709 within a specified period (e.g., 120 days from the ruling date) for transfers made in prior years.
Source: IRS Written Determinations · 2026-05-29
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Written by Iris
Published on June 2, 2026