Proposed regulations dealing with the sale of a partnership have been issued by the IRS (REG-113604-18) to implement changes made by Congress in the Tax Cuts and Jobs Act. Specifically, TCJA made the following changes to deal with foreign holders of partnership interests:

• Requiring foreign partners to treat the sale of a partnership interest as “effectively connected” with a U.S. trade or business if a sale of the partnership’s assets would have created such effectively connected income (overturning the result in Grecian Mining v. Commissioner, 149 TC No. 3); and

• Requiring the buyer of a partnership interest to withhold 10% of the purchase price unless the buyer certifies the buyer is not a foreign person.

• These proposed regulations deal only with the first category of transactions--rules on withholding are not in this of regulations, though the preamble notes that Treasury and the IRS “intend to issue guidance under section 1446(f) expeditiously.”