This comprehensive case-driven training is designed to quickly get the accountant up to speed in basis calculations and distribution planning for the owners of pass-thru entities (i.e., S corporations, partnerships, and limited liability companies (LLCs)). The cornerstone of this course is the line-by-line analysis of the Schedule K-1s and how it affects the basis calculations. This session is taught using a Hands-On methodology. Real-world examples and cases demonstrate the complex income tax code and regulations to enhance the participant's learning experience. Each attendee will receive the most comprehensive reference manual with numerous practice aids, real-world examples, and case studies.
Learning Objectives
• List the three main reasons for calculating a shareholder’s basis in an S corporation and partner/member’s basis in a partnership/LLC
• Calculate the stock and debt basis for S corporation shareholders
• Calculate the basis for partners and members of an LLC
• Calculate losses allowed from at-risk activities
• Review the Form 1120S and Form 1065 Schedule K-1s to determine how the line items affect basis calculations and get reported on the individual owner’s Form 1040
Major Topics
• Detailed coverage of any new legislation affecting basis computations and distributions and changes to the schedule K-1s (including the Form 7203—S Corporation Shareholder Stock and Debt Basis Limitations)
• Line-by-line analysis of the Schedule K-1s to determine how the items affect an S shareholder’s stock and debt basis and a partner/member’s outside basis and where the items get reported on Federal individual income tax return
• The three loss and deduction limitations on the owner’s individual income tax return (i.e. basis, at-risk and other Form 1040 limitations)
• How cash or non-cash distributions affect the basis calculations and whether or not they are taxable to the owners
• Compare the tax treatment of the sale of a shareholder’s stock in an S corporation and a partner’s interest in a partnership
• What constitutes debt basis for an S corporation shareholder under the final regulations
• The tax ramifications of repaying loans to S corporation shareholders and on open account debt
• How recourse and non-recourse debt affect a partner or member’s basis calculations and amount at-risk
