Single-member LLCs and grantor trusts are both entities that exist for state law purposes but are disregarded for federal income tax purposes. These entities are commonly known as disregarded entities or DREs. The ownership of partnership interests by a disregarded entity creates the question of who the partner really is.
A limited liability company has great flexibility in federal and state tax treatment under Treas. Reg. § 1.7701-3. The default treatment of an LLC that has a single owner is for the LLC to be disregarded as an entity separate from its owner. So, who is the partner if a disregarded LLC owns a partnership interest? The IRS answered that in Rev. Rul. 2004-77, which confirms an entity disregarded under federal tax law is ignored under federal partnership law. Thus, the disregarded entity’s owner is treated as the partner.
Greetings, fellow members of the Construction Law Section, and welcome to the 2020-2021 bar year! It is my honor and privilege to serve as Chair this year and to work with an outstanding group of council members, committee co-chairs, and NCBA staff to reward your Section membership with top-notch programming, activities, content, and other benefits, all aimed at adding meaningful value to your law practices and professional development.
Like the clients and the industry that we serve, our Section will face unique challenges in the months ahead as North Carolina and the country at-large continue to navigate the COVID-19 pandemic. Those challenges include safely providing the same excellent CLE programming that has served as the cornerstone of our Section’s offerings each year. Toward that end, our CLE Committee is working diligently to transition its Summer 2020 program, originally scheduled for in-person presentation in Wilmington, to a webcast format. I urge all of you to mark your respective calendars for the Committee’s “Laying the Foundation, Brick by Brick” CLE webcast the afternoon of Thursday, September 24 and all day Friday, September 25. This not-to-be-missed “sticks-and-bricks” program will focus on a range of construction practices presented by industry experts as well as your Section cohorts, with sessions focused on zoning and other regulatory issues, civil and structural engineering, building envelope considerations, and much more (including Jay Wilkerson’s always anticipated case law update). Please watch this space for additional details soon. And since your calendars are now open, go ahead and mark Thursday, February 18, 2021, for our Winter CLE program and Annual Meeting, to be held in-person (fingers crossed!) at the Bar Center in Cary. Again, details to follow.
https://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00Constructionhttps://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngConstruction2020-07-17 10:52:342020-08-12 17:23:41Happy New (Bar) Year, Construction Lawyers
I write to provide a few updates and red flags regarding plans for the upcoming school year in light of ongoing coronavirus spikes.
These updates are directly relevant to any education clients you currently have in your offices, and also to any other clients who may have school-aged children in the home.
Gov. Cooper has announced that the default plan for schools will be “Plan B,” which requires a hybrid in-person/remote plan to be created locally. This plan will enable districts and charter schools to operate at no more than 50% capacity whenever in-person instruction occurs.
https://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00JuvenileJusticehttps://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngJuvenileJustice2020-07-16 12:14:492020-08-12 17:22:10Education Decisions in the Wake of COVID-19
Zac Bolitho is now of counsel with Cranfill Sumner & Hartzog LLP in Raleigh. He will practice with the White Collar & Criminal Defense Group. Prior to joining the firm, Bolitho was an Associate Deputy Attorney General and the Chief of Staff to Deputy Attorney General Rod Rosenstein at the U.S. Department of Justice in Washington, D.C. Bolitho serves as an Associate Professor of Law at Campbell Law School in Raleigh. He received a Bachelor of Arts, summa cum laude, from the University of Mount Union, and a Juris Doctorate, summa cum laude, from The Ohio State University.
Morningstar Law Group announced that Marie Farmer is now an associate attorney with the firm. She will practice in the Litigation Practice Group. Prior to Morningstar Law, Farmer was a legal fellow at the University of North Carolina’s Office of Legal Counsel. There, she offered litigation support and assisted in a variety of areas, including constitutional, healthcare, employment, and intellectual property law. Farmer obtained a Juris Doctorate from the University of North Carolina School of Law, and she holds a Bachelor of Arts in Criminology and Law and Philosophy from the University of Florida.
Smith Anderson welcomes Mark Griffith, a corporate attorney, to the firm. Griffith will work with the Energy and Renewable Energy and M&A practice teams. He has significant experience in energy transactions, economic development and matters related to financial institutions. Prior to Smith Anderson, Griffith practiced with Troutman Sanders. He serves on the chamber of commerce and has taught a course on renewable energy transactions at UNC School of Law. Griffith graduated from the University of North Carolina, with honors, where he received a Bachelor of Arts, and from UNC School of Law, with honors, where he earned a Juris Doctorate.
Tomorrow, July 10, will be the first convening of the Governor’s Task Force for Racial Equity in Criminal Justice, which I am co-chairing with Justice Anita Earls.
This Task Force has been created to examine our criminal justice system through a lens of racial equity. In North Carolina, we have long sought to improve our criminal justice system. Now, we have the opportunity—the imperative—to explicitly consider racial equity as we continue this effort.
The inequities that African Americans experience—whether it’s in the economy, health care, our schools, or the criminal justice system—are pervasive, just as they are wrong. Even today, African Americans are suffering death at a greatly disproportionate rate from COVID-19 due to longstanding inequities.
https://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00CriminalJusticehttps://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngCriminalJustice2020-07-09 18:24:452020-08-12 17:20:39N.C. Marks an Important Moment for Racial Equity in Criminal Justice
Over the past few weeks, parents all over the country let out a collective sigh of relief when the school year ended. They could relinquish their new duties as at-home [insert subject here] teacher. Meanwhile, college and graduate students sat for final exams remotely, shifted to pass/fail grading rubrics, and mourned lost graduations and rites of passage.
Educational institutions from elementary schools to law schools are now considering whether to go fully or partially online in the fall of 2020 and beyond. While privacy has long been a conversation in the education sector, data privacy and cybersecurity issues should be front and center for not only decision-makers but also educators, faculty, and administrators as they make these decisions. Data privacy and cybersecurity issues will not be new to those in the education sector, but what may be novel are all the different parties who may now have access to personal information. These include technology vendors who are not familiar with the student data regulatory landscape, as well as new sources of data as more online tools are leveraged in the distance learning environment. The shifting privacy and cybersecurity landscape makes this a daunting task even for the most tech-savvy institutions. So, where should one start? As discussed in detail below, educators and administrators should ground themselves in applicable requirements under federal and state privacy laws, conduct due diligence on all education technology vendors, and implement or update distance learning policies.
https://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00Securityhttps://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngSecurity2020-07-09 11:15:002020-08-12 17:17:40School’s Out for Summer! (School’s Out Forever?): Distance Learning Policies and The New Normal
The practice of workers’ compensation law in North Carolina continues to adapt to the challenges we all face associated with the COVID-19 Pandemic. Currently, the North Carolina Industrial Commission is primarily holding hearings via video conference on the WebEx platform. In certain limited matters, in person hearings are taking place when ordered by the Deputy Commissioner presiding over the hearing. Recently, the NCIC published Guidelines for In-Person Hearings during the COVID-19 Pandemic.
These guidelines are intended to give practitioners, parties and witnesses to an In-Person NCIC hearing precautions that should be taken during the hearing, including the utilization of face masks and other sanitary measures. It also addresses when individuals should not come to a hearing, such as if they have symptoms associated with COVID-19, confirmed diagnosis of COVID-19 or contact with individuals known to have been diagnosed with COVID-19. If you have a matter that is going to be heard in person, be sure to review the guidelines to enable to the hearing to proceed as safely as possible for all involved.
https://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00WorkersComphttps://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngWorkersComp2020-07-08 14:32:062020-08-12 17:15:16NCIC Guidelines for Hearings during the COVID-19 Pandemic
“There is a great future in plastics. Think about it. Will you think about it?”
(Mr. Maguire speaking to Benjamin Braddock in The Graduate)
The Sustainability Committee is thrilled to announce our winners for this year’s NCBA EENR Sustainability Contest. Our topic this year was—you guessed it—plastics, and our contestants did a terrific job of thinking about what that “great future in plastics” looks like now.
Specifically, we asked students to respond to the following prompt:
As members of the Juvenile Justice and Children’s Rights Section, we stand in solidarity with our friends and colleagues in the Black community and condemn the tragic and senseless killings of George Floyd, Breonna Taylor, Ahmaud Arbery, Rayshard Brooks, and many others. We know that racism is deeply rooted in American society and recognize the devastating impact it has on people of color, from daily indignities and marginalization to the tragic loss of these four lives and so many more. We cannot remain silent in the face of these injustices. As lawyers and advocates, it is our ethical duty to condemn white supremacy and actively work to eliminate racial bias in the justice system.
A key mission of the Juvenile Justice and Children’s Rights Section is to promote racial justice through education, awareness, and advocacy within the North Carolina Bar Association, and most importantly, through our work as child and youth advocates. Several years ago, we established a Racial Justice Committee to directly address the harmful impact of structural racism on children of color across systems, including education, child welfare, and juvenile justice. These systems disproportionately fail children of color, as evidenced by the achievement gap, the overrepresentation of minority children in the child welfare and juvenile justice systems, and the school-to-prison pipeline.
https://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.png00JuvenileJusticehttps://ncbarblogprod.wpengine.com/wp-content/uploads/2018/06/Blog-Header-1-1030x530.pngJuvenileJustice2020-07-06 17:27:322020-08-12 17:14:05On A Mission To Address Racial Injustice
Members of the Sports & Entertainment Law (“SEL”) Section found the following recent third-party articles to be of potential interest to the Section. Feel free to reach out to the SEL Section communications chair, Kelly Ryan, if you would like to submit either personally written pieces or other third-party articles that would be of interest to the entire SEL Section members.
Disregarded Entities and Partnerships
Tax SectionSingle-member LLCs and grantor trusts are both entities that exist for state law purposes but are disregarded for federal income tax purposes. These entities are commonly known as disregarded entities or DREs. The ownership of partnership interests by a disregarded entity creates the question of who the partner really is.
A limited liability company has great flexibility in federal and state tax treatment under Treas. Reg. § 1.7701-3. The default treatment of an LLC that has a single owner is for the LLC to be disregarded as an entity separate from its owner. So, who is the partner if a disregarded LLC owns a partnership interest? The IRS answered that in Rev. Rul. 2004-77, which confirms an entity disregarded under federal tax law is ignored under federal partnership law. Thus, the disregarded entity’s owner is treated as the partner.
Read more
Happy New (Bar) Year, Construction Lawyers
Construction Law SectionBy Matt Bouchard
Greetings, fellow members of the Construction Law Section, and welcome to the 2020-2021 bar year! It is my honor and privilege to serve as Chair this year and to work with an outstanding group of council members, committee co-chairs, and NCBA staff to reward your Section membership with top-notch programming, activities, content, and other benefits, all aimed at adding meaningful value to your law practices and professional development.
Like the clients and the industry that we serve, our Section will face unique challenges in the months ahead as North Carolina and the country at-large continue to navigate the COVID-19 pandemic. Those challenges include safely providing the same excellent CLE programming that has served as the cornerstone of our Section’s offerings each year. Toward that end, our CLE Committee is working diligently to transition its Summer 2020 program, originally scheduled for in-person presentation in Wilmington, to a webcast format. I urge all of you to mark your respective calendars for the Committee’s “Laying the Foundation, Brick by Brick” CLE webcast the afternoon of Thursday, September 24 and all day Friday, September 25. This not-to-be-missed “sticks-and-bricks” program will focus on a range of construction practices presented by industry experts as well as your Section cohorts, with sessions focused on zoning and other regulatory issues, civil and structural engineering, building envelope considerations, and much more (including Jay Wilkerson’s always anticipated case law update). Please watch this space for additional details soon. And since your calendars are now open, go ahead and mark Thursday, February 18, 2021, for our Winter CLE program and Annual Meeting, to be held in-person (fingers crossed!) at the Bar Center in Cary. Again, details to follow.
Read more
Education Decisions in the Wake of COVID-19
Juvenile Justice & Children's RightsFellow advocates,
I write to provide a few updates and red flags regarding plans for the upcoming school year in light of ongoing coronavirus spikes.
These updates are directly relevant to any education clients you currently have in your offices, and also to any other clients who may have school-aged children in the home.
Read more
Checking In: July 14, 2020
Checking InCompiled by Jessica Junqueira
New Hires
Zac Bolitho is now of counsel with Cranfill Sumner & Hartzog LLP in Raleigh. He will practice with the White Collar & Criminal Defense Group. Prior to joining the firm, Bolitho was an Associate Deputy Attorney General and the Chief of Staff to Deputy Attorney General Rod Rosenstein at the U.S. Department of Justice in Washington, D.C. Bolitho serves as an Associate Professor of Law at Campbell Law School in Raleigh. He received a Bachelor of Arts, summa cum laude, from the University of Mount Union, and a Juris Doctorate, summa cum laude, from The Ohio State University.
Morningstar Law Group announced that Marie Farmer is now an associate attorney with the firm. She will practice in the Litigation Practice Group. Prior to Morningstar Law, Farmer was a legal fellow at the University of North Carolina’s Office of Legal Counsel. There, she offered litigation support and assisted in a variety of areas, including constitutional, healthcare, employment, and intellectual property law. Farmer obtained a Juris Doctorate from the University of North Carolina School of Law, and she holds a Bachelor of Arts in Criminology and Law and Philosophy from the University of Florida.
Smith Anderson welcomes Mark Griffith, a corporate attorney, to the firm. Griffith will work with the Energy and Renewable Energy and M&A practice teams. He has significant experience in energy transactions, economic development and matters related to financial institutions. Prior to Smith Anderson, Griffith practiced with Troutman Sanders. He serves on the chamber of commerce and has taught a course on renewable energy transactions at UNC School of Law. Griffith graduated from the University of North Carolina, with honors, where he received a Bachelor of Arts, and from UNC School of Law, with honors, where he earned a Juris Doctorate.
Read more
N.C. Marks an Important Moment for Racial Equity in Criminal Justice
Criminal JusticeBy Josh Stein
Tomorrow, July 10, will be the first convening of the Governor’s Task Force for Racial Equity in Criminal Justice, which I am co-chairing with Justice Anita Earls.
This Task Force has been created to examine our criminal justice system through a lens of racial equity. In North Carolina, we have long sought to improve our criminal justice system. Now, we have the opportunity—the imperative—to explicitly consider racial equity as we continue this effort.
The inequities that African Americans experience—whether it’s in the economy, health care, our schools, or the criminal justice system—are pervasive, just as they are wrong. Even today, African Americans are suffering death at a greatly disproportionate rate from COVID-19 due to longstanding inequities.
Read more
School’s Out for Summer! (School’s Out Forever?): Distance Learning Policies and The New Normal
Privacy and Data SecurityBy Rachel LaBruyere
Over the past few weeks, parents all over the country let out a collective sigh of relief when the school year ended. They could relinquish their new duties as at-home [insert subject here] teacher. Meanwhile, college and graduate students sat for final exams remotely, shifted to pass/fail grading rubrics, and mourned lost graduations and rites of passage.
Educational institutions from elementary schools to law schools are now considering whether to go fully or partially online in the fall of 2020 and beyond. While privacy has long been a conversation in the education sector, data privacy and cybersecurity issues should be front and center for not only decision-makers but also educators, faculty, and administrators as they make these decisions. Data privacy and cybersecurity issues will not be new to those in the education sector, but what may be novel are all the different parties who may now have access to personal information. These include technology vendors who are not familiar with the student data regulatory landscape, as well as new sources of data as more online tools are leveraged in the distance learning environment. The shifting privacy and cybersecurity landscape makes this a daunting task even for the most tech-savvy institutions. So, where should one start? As discussed in detail below, educators and administrators should ground themselves in applicable requirements under federal and state privacy laws, conduct due diligence on all education technology vendors, and implement or update distance learning policies.
Read more
NCIC Guidelines for Hearings during the COVID-19 Pandemic
Workers' Compensation SectionThe practice of workers’ compensation law in North Carolina continues to adapt to the challenges we all face associated with the COVID-19 Pandemic. Currently, the North Carolina Industrial Commission is primarily holding hearings via video conference on the WebEx platform. In certain limited matters, in person hearings are taking place when ordered by the Deputy Commissioner presiding over the hearing. Recently, the NCIC published Guidelines for In-Person Hearings during the COVID-19 Pandemic.
These guidelines are intended to give practitioners, parties and witnesses to an In-Person NCIC hearing precautions that should be taken during the hearing, including the utilization of face masks and other sanitary measures. It also addresses when individuals should not come to a hearing, such as if they have symptoms associated with COVID-19, confirmed diagnosis of COVID-19 or contact with individuals known to have been diagnosed with COVID-19. If you have a matter that is going to be heard in person, be sure to review the guidelines to enable to the hearing to proceed as safely as possible for all involved.
2020 NCBA Sustainability Contest Winners
Environment Energy & Natural ResourcesBy Maria Savasta-Kennedy
“There is a great future in plastics. Think about it. Will you think about it?”
(Mr. Maguire speaking to Benjamin Braddock in The Graduate)
The Sustainability Committee is thrilled to announce our winners for this year’s NCBA EENR Sustainability Contest. Our topic this year was—you guessed it—plastics, and our contestants did a terrific job of thinking about what that “great future in plastics” looks like now.
Specifically, we asked students to respond to the following prompt:
Read more
On A Mission To Address Racial Injustice
Juvenile Justice & Children's RightsAs members of the Juvenile Justice and Children’s Rights Section, we stand in solidarity with our friends and colleagues in the Black community and condemn the tragic and senseless killings of George Floyd, Breonna Taylor, Ahmaud Arbery, Rayshard Brooks, and many others. We know that racism is deeply rooted in American society and recognize the devastating impact it has on people of color, from daily indignities and marginalization to the tragic loss of these four lives and so many more. We cannot remain silent in the face of these injustices. As lawyers and advocates, it is our ethical duty to condemn white supremacy and actively work to eliminate racial bias in the justice system.
A key mission of the Juvenile Justice and Children’s Rights Section is to promote racial justice through education, awareness, and advocacy within the North Carolina Bar Association, and most importantly, through our work as child and youth advocates. Several years ago, we established a Racial Justice Committee to directly address the harmful impact of structural racism on children of color across systems, including education, child welfare, and juvenile justice. These systems disproportionately fail children of color, as evidenced by the achievement gap, the overrepresentation of minority children in the child welfare and juvenile justice systems, and the school-to-prison pipeline.
Read more
SEL Section – Articles of Interest (June 2020)
Sports & Entertainment Law SectionMembers of the Sports & Entertainment Law (“SEL”) Section found the following recent third-party articles to be of potential interest to the Section. Feel free to reach out to the SEL Section communications chair, Kelly Ryan, if you would like to submit either personally written pieces or other third-party articles that would be of interest to the entire SEL Section members.
Back to Business: Hollywood Producers Navigate the Choppy Waters of Reopening Plans and Labor Relations
Cheating in esports: Lessons to learn from the Formula E Racing at Home Challenge
Conducting Your Way Through Music Licensing: The Most Common Issues
Read more