Advanced Taxation LLCs & Partnerships - Tax Staff Essentials

Objectives:

Learning Outcomes

• Calculate what a partner will receive in complete liquidation of their partnership interest under Title 26 U.S. Code of Federal Regulations (CFR) Section 704(b) regulations.
• Identify the potential economic consequences of special allocations to a partner or LLC member.
• Distinguish between "book" allocations required under Section 704(b) and "tax" allocations required under Section 704(c).
• Identify the potential tax consequences when a partner or LLC member makes a contribution of appreciated or depreciated property to the entity.
• Distinguish among the various methods prescribed by the regulations to make required special allocations with respect to contributed property.
• Distinguish between recourse and nonrecourse liabilities of a partnership or LLC.
• Calculate the basis of each property received by a partner or member receiving multiple properties in liquidating and nonliquidating distributions from a partnership or LLC.
• Recognize which properties will receive a step up or step down in basis when multiple properties are received from a partnership or LLC.
• Assess when a partnership or LLC should make a Section 754 election to allow it to increase or decrease the basis of its assets.
• Analyze the sale of a partnership interest and calculate the amount of gain that must be treated as ordinary income under Section 751(a).
• Evaluate how the installment method will affect how a partner will report gain or loss on the sale of a partnership interest.
• Assess the consequences for the buyer associated with the sale of an interest in a partnership or LLC.

Major Topics:

Key Topics

• Allocation of partnership and LLC income under IRC Section 704(b)
• Allocations with respect to contributed property - Section 704(c)(1)(A)
• Allocation of partnership recourse liabilities under Section 752
• Allocation of partnership nonrecourse liabilities and related deductions under Sections 752 and 704(b)
• Advanced distribution rules
• Adjustments to the basis of partnership or LLC assets
• Sale of an interest in a partnership or LLC
• "Hot" assets and Section 751(a)
• Section 754 elections; Sections 734(b) and 743(b) adjustments
• Section 708 technical termination

Designed For:

Who Will Benefit

Managers and partners in public accounting who assist clients with tax planning for closely held LLCs and partnerships

Prerequisite:

Basic knowledge of business taxation