A foundational understanding of partnership taxation is essential to a tax preparer's career. Given that most U.S. businesses are formed as pass-through entities, practitioners likely encounter partnership tax matters that require attention. This course provides participants who are new to the subject or have worked in this area but need a quick review with a firm grasp of the fundamental concepts needed to build a strong foundation of knowledge and freshen up analytical skills. Participants can also leverage the tone of the course materials to explain complex issues to their clients with accuracy and confidence.
Learning Objectives
When you complete this course, you will be able to:
- Identify the effects of investor contributions and distributions on their basis in a partnership or LLC interest.
- Identify the tax basis of assets transferred to a partnership or limited liability company (LLC) at formation.
- Recognize the tax consequences of a transfer of liabilities to a partnership or LLC in connection with property transfers at formation.
- Indicate the correct treatment of partnership income by a partner for self-employment tax purposes.
- Distinguish between current and liquidating distributions.
- Recall whether special allocations called for in a partnership agreement will be allowable under the Section 704(b) regulations and when they will not be recognized by the IRS.
Major Topics
- Basic tax structure of partnerships and LLCs
- Check-the-box elections to be taxed as a partnership
- Partnership distributions
- Compensatory payments to partners
- At-risk and passive activity limits
- Profit and loss allocations: general rules and restrictions
