IRS Form 7217 is an IRS tax form required for partners receiving distributions of property from partnerships. Starting for tax years beginning in 2024, a partner who receives property from a partnership must file Form 7217 with his or her annual income tax return. Form 7217 is filed by any partner receiving a distribution of property from a partnership to report the basis of the distributed property, including any basis adjustment to such property as required by Section 732(a)(2) or (b). This new IRS form is part of the IRS’s general concern regarding basis shifting in favor of high marginal tax rate related partners. Form 7217 is now required and details the types of property distributed, the aggregate basis, and the allocation of basis to the distributed property. Form 7203 is designed to assist in tracking an S corporation shareholder’s stock and debt basis. Form 7203 is a significant improvement from the worksheets the IRS provided formerly and over time will serve to help partners and partnerships keep track of their stock and debt basis. The course covers the structure and organization of Form 7203 as well as how an S corporation shareholder’s stock and debt basis are calculated.
Learning Objectives
- Understand the latest regarding distributions of property from partnerships
- Understand shareholders’ stock and debt basis
Major Topics
- Tax treatment of partnership distributions to partners of cash and property other than cash
- Basis of property received in a partnership distribution
- Executive Order 14219 withdrawing the IRS’s new regulations regarding basis shifting
- Organization and structure of the new Form 7217
- Who must file Form 7203
- Determining the S corporation shareholder’s initial basis in his or her stock
- Basis limitations on partnership losses and deductions
- Organization and structure of Form 7203 — understanding the three parts of Form 7203
- Filing criteria for Form 7203
- Calculating an S corporation shareholder’s share of S corporation deductions and credits
- Understanding stock and debt basis
