Taxation of partnerships continues to become more complex every year. This course highlights the significant areas of concern for tax advisors and their clients in compliance and planning for partnership operations, distributions and transactions. Topics covered include unique and targeted allocations, proper calculation of outside and inside tax basis, tax consequences of distributions, the impact of “hot assets” on distributions, transfer of partnership interests, and issuance of partnership interests to service partners. This course will also help you add immediate value to your partnership clients by correctly calculating and reporting critical partnership tax items that generate most IRS audit adjustments.
Learning Objectives
• Recognize the issues surrounding t he formation and operations of a federally taxed partnership
• Understand how to allocate income and loss under various methods, including targeted allocations, the proper use of the three §704(c) allocation methods, and how to maintain the §704(b) book capital accounts
• Calculate partnership tax r eporting items, including recourse and non-recourse debt on the Schedule K-1, allocating minimum gain allocation amounts,, and gain potential attributable to operating and liquidating distributions
• Determine how to properly calculate the income tax on the sale of a partnership interest as well as the tax impact of the distribution of cash and non-cash assets for both proportionate and disproportionate distributions
Major Topics
• Special and Targeted allocations
• Proper calculation of outside and inside tax basis
• Tax consequences of distributions including the impact of “hot assets”
• Transfer of partnership interests
• Issuance of partnership interests to service partners
