Income Tax Accounting for Partnerships and Partners – Capital Accounts, Basis, Purchase and Sale of Partnership Interest (LITX01/23)
Part 1 (of this two-part course) focuses on a partner (or LLC member) entering into a partnership (including an LLC taxed as a partnership) and capital accounts and basis. Both book and tax capital accounts will be discussed along with both inside tax basis in partnership assets and outside basis of a partner in his, her or its partnership interest.
Enrolled Agent Approved
CPAs, EAs and Attorneys who prepare partnership returns and/or advise partners on partnership interest acquisition or capitalization.
• To develop an appreciation of a partner’s capital account and basis in his, her or its partnership interest
• To learn the effect of a forgiven PPP loan or restaurant revitalization grant, shuttered venue operator grant, EIDL advance or government subsidized principal or interest payment on basis
• To learn the pros and cons of §754 elections to step up (or down) a partner’s share of basis in partnership assets
• To explore transactions affecting basis (and capital accounts) and how such transactions are reported on Schedules K-1, K-2 and K-3
• To understand the disguised sale rules on contribution and distribution of appreciated property to a partnership
• To explore the difference between book and tax capital accounts and why it matters
• Basics and beyond of partner book and tax capital accounts and basis
• To learn the timing and effect of recent Congressional Covid relief on a partner’s basis
• §754 elections to step up (or down) a partner’s share of basis in partnership assets – Opportunities, curses and recent developments
• Reporting of basis, capital accounts and other related items required on Form 1065 and Schedules K-1, K-2 and K-3
• How the disguised sale rules can really shake up the capitalization and operation of a partnership
• A thorough look at tax vs. book partner capital accounts, all of the recent reporting flurry and why it matters