As staff members gain more experience, they are expected to take on more complex assignments with minimal supervision. This course is designed to be a steppingstone for staff interested in pursuing more advanced partnership and LLC issues than mere preparation. The material provides a deep 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 traªnsfers of ownership interest, distributions, self-employment tax issues, and termination and liquidations of an LLC. With a blend of legal and tax ramifications regarding LLC-specific issues, this course identifies all the major areas that are potential sources of increased complexity.
Learning Objectives
- Prepare complicated partnership returns
- Understand certain advanced concepts of partnership taxation
Major Topics
- Reporting requirements for Schedules K-2 and K-3
- Capital account reporting requirements
- Schedule K-1 reporting for §743 adjustments
- Schedule K-1 reporting for §704 gains and losses
- Comprehensive case on partnership/partner application of the business interest deduction
- Section 704(b) basis versus tax basis for capital accounts
- Detailed rules of §704 for preventing the shifting of tax consequences among partners or members
- Unreasonable uses of the traditional and curative allocation methods
- Layers of §704(c) allocations
- Treatment of recourse versus nonrecourse debt basis
- How to calculate basis limitations and the implications 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 that have not made a §754 election
- Subsequent contributions of property with §754 adjusted basis to another partnership or corporation
- Capital account adjustments in connection with admission of new members
- Special allocations and substantial economic effect
- LLCs and self-employment tax to members
- Distributions – current or liquidating, cash or property, and the substituted basis rule
- Termination and liquidation of an LLC
