Fall 2014 Newsletter
Warren & Selbert

Solar Power International will be held in Las Vegas next week, and Lee and Dana will be there! If you are also attending, please contact them to set up a meeting.

On August 27th, FASB met and tentatively decided to grandfather transactions recorded as leveraged leases in accordance with FAS 13. This means that these transactions would not need to be restated for book purposes once new rules take effect. No timetable has been set for a transition date, but new rules are not expected to go into effect before 2018. FASB posted a summary of the meeting online

Lee Silverman travelled to South Africa with family, and got up close and personal with great white sharks.

Eric Seale saw his youngest child off to college, marking a significant event in the Seale house.

Erik Hellman finally took a trip out to the Channel Islands this summer, satisfying a childhood curiosity; the islands were in view from his home growing up.

Dana Iltis travelled to Crete to attend an authentic Greek wedding.

Peter Sangas has a new passion: stand up paddle surfing. Be sure to let Peter know if you'll be visiting us in Santa Barbara and you'd like to give SUPing a try!

ABC Updates

Reallocations due to DRO limits and Minimum Gain requirements can now be more easily tracked and identified in PSHIP using the new PSHIP/REALLOC report. REALLOC displays partner-level summary reports along with a number of additional detail proof reports, including a category and type breakdown of each annual allocation and an interpreted amount of reallocation associated with each ABC stream. The report supports income holdback percentages and above-the-line reallocations of non-production income as specified by section 120 questions (see below). The report also provides a detail of reallocation due to Minimum Gain protection, if this feature is present in the file.

PSHIP/REALLOC is available under the standard list of PSHIP reports, and is included as a selected report in PSHIP/REPORTSET.

Section 120: PSHIP Flags
PSHIP offers many flags that modify our default partnership structuring rules. These flags have previously been required as inputs to the "User Definitions" question (1.3) using CALC assignment. Now PSHIP offers section 120 to allow easier flag discovery and activation. Section 120 is available in either newly created files, or files that have been updated using the PSHIP/UPDATE macro.

For a list of available PSHIP flags and their associated section 120 question number, run the PSHIP/FLAGS report. 

DRO Input Improvements
PSHIP questions controlling Deficit Restoration Obligations (1.709 and 1.809 for Investor and Sponsor, respectively) now accept limited compound inputs. A nominal dollar amount may precede a percentage of project FMV or partner equity. For instance, "100,000.00 + 30%e" in question 1.709 would be interpreted as a DRO limit of $100,000.00 plus 30% of the investor's equity.

Alternative Percent Taxable Input Method in ABC
A new set of questions allow more flexibility with percent taxable inputs for income or loss items associated with an ABC stream. Percentages can now be input on a monthly schedule rather than on a fiscal year schedule. This new mode allows greater refinement of tax allocation within the same fiscal year, and is most commonly used in partnership alternatives created in a PSHIP file.

Contribution Split in PSHIP
Useful for contributed property basis step-up calculations, a new PSHIP question (2.702) can be used to override the portion of an investment that is deemed as a sale to the investor. When this question is active, the portion of FMV depreciation is no longer computed based upon the purchase split (2.701). This new option allows the user to specify an amount that differs from the actual capital outflow, allowing separation of the investor's cash investment from the amount used to compute partnership inside basis.

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