Partnership and LLC Core Tax Issues From Formation Through Liquidation (PLTI8W23)

Overview:

As they gain more experience, staff are expected to take on more complex assignments with minimal supervision. The course is designed to be a stepping stone for staff interested in pursuing more advanced partnership and LLC issues than mere preparation, via deeper life-cycle study into critical areas of formation, special allocations of income and deductions, basis calculations and implications of recourse and nonrecourse debt, basis step-up under §754 on transfer of an ownership interest, distributions, self-employment tax issues, and termination/liquidation of the LLC. With the right blend of legal and tax ramifications of LLC-specific issues, this course identifies all the major areas that are potential sources of increased complexity.

Major Topics

• New capital account reporting requirements
• CARES Act and effect on excess business losses and business interest deductions. Tax Relief Act clarifying guidance on effect of PPP loan forgiveness on tax attributes and partners’ basis
• New Schedule K-1 reporting for §743 adjustments
• New Schedule K-1 reporting for §704 gains and losses
• Comprehensive case on partnership/partner application of the business interest deduction
• When to use “704(b) basis” for capital accounts versus “tax basis”
• Detailed rules of §704 for preventing the shifting of tax consequences among partners or members
• Unreasonable uses of the traditional & curative allocation methods
• Multiple layers of §704(c) allocations
• Treatment of recourse versus nonrecourse debt basis
• How to calculate basis limitations and its implication on each partner’s own tax return
• How §179 limitations affect partnership/LLC basis
• Regulations for handling basis step-ups under §754 elections, and mandatory adjustments under §743 and §734 for partnerships who have NOT made the §754 election
• Subsequent contributions of property with §754 adjusted basis to another partnership or corporation
• Capital account adjustments in connection with admission of new member
• Special allocations require "substantial economic effect"; what are the requirements?
• LLCs and self-employment tax to the members
• Distributions -- current or liquidating, cash or property including the substituted basis rule
• Termination/liquidation of an LLC
   

Learning Objectives

• Prepare more complicated partnership returns
• Understand certain advanced concepts of partnership taxation

Designed for:

Experienced CPAs desiring a comprehensive case approach to understand reasonably complex limited liability company issues and problems; also, CPAs who want a comprehensive, intermediate-level limited liability company practice manual

Level of Knowledge: Intermediate

Prerequisite: Knowledge and experience in business taxation

Advanced Preparation: None