Monte Jackel Quoted in Tax Notes Today on Bottom-Dollar Guarantees

Tax Notes Today has quoted Akin Gump senior counsel Monte Jackel in the article “Will Bottom-Dollar Guarantees Be Preserved?” The article addresses the guarantees that have been used to effectively convert nonrecourse real estate debt to recourse debt so partners could include it in their bases in their partnership interests.

Under one proposal being floated, Jackel said, a contributing partner would be allocated nonrecourse debt on other partnership assets that is not recourse to any of the partners and that would not affect the contributed property. In terms of the built-in gain rules, he said, the proposal would have the effect of preventing the gradual recognition of gain equal to liabilities in excess of basis by the contributing partner. In other words, it would enhance the benefit of the traditional method.