CPE Course Allocating Partnership/LLC Income, Losses and Debt to Partners

October 31, 2017

11:30AM — 3:00 PM

Location Webinar

Member Price $120.00
Non-member Price $188.00

Curriculum Taxation

Field of Interest

Level Intermediate

Designed For

Attorneys who draft partnership agreements; CPAs who prepare forms 1065, 568, 565 and K-1 for partnerships and LLCs; and CPAs who prepare partner income tax returns or forms 1040 or 1120, or who advise partners on tax-smart strategies.

4.00 credits

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Objective

  • Recognize the difference between book and tax basis capital accounts.
  • Recognize the Treasury Capital Account Method of allocating income, gains, losses, and deductions under section 704(b).
  • Determine when the partnership agreement enables a partner to meet the safe harbor for economic effect.
  • Identify the strengths and weaknesses of the Target Capital Account Method.
  • Determine when an LLC member or Limited Partner can have a negative capital account.
  • Recognize terminology in partnership agreements such as “partnership minimum gain," “partner minimum gain," “partnership nonrecourse deductions” and “partner nonrecourse deductions."
  • Recognize and understand the importance of a “minimum gain chargeback” and a “qualified income offset” in a partnership agreement.
  • Determine when capital accounts can be optionally revalued and why it matters.
  • Identify the “ceiling rule” and the three regulatory methods of making section 704(c) allocations.
  • Distinguish recourse debt from nonrecourse debt, and qualified nonrecourse financing.
  • Recognize the definition of a “bottom-dollar payment obligation” and why it matters.
  • Determine how to properly report each partner’s debt share on IRS Schedule K-1.
  • Recognize the competing strategies that arise when partners contribute cash, appreciated property or services to a partnership.
     

Highlights

  • Allocating income, gain, deductions and losses under section 704(b).
  • Distinguishing the Treasury Capital Account Method from the Target Capital Account Method.
  • Allocations of built-in gain or loss pursuant to section 704(c).
  • Properly characterizing debt as recourse, nonrecourse, or qualified nonrecourse financing.
  • Allocating debt to the partners pursuant to section 752.

Instructors

Prerequisites

General knowledge in partnership taxation.

Developer

California Society of CPAs

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