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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 0 ||| Review Questions: 0 ||| Final Exam Questions: 120 |
| CPE Credits : | 24.0 |
| IRS Credits : | 24 |
| Price : | $145.95 |
| Passing Score : | 70% |
| Course Type: | NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents |
| Technical Designation: | Technical |
| Primary Subject-Field Of Study: | Taxes - Taxes for Course Id 325 |
| Description : | The program will examine tax issues relating to the formation and operation of partnerships. Participants will gain familiarity with basic areas of partnership taxation so as to recognize a problem and have at hand some practical knowledge for its solution. This course is presented in four practical segments: (1) the formation of partnerships, (2) the basic day-to-day operations of partnerships, (3) the distributions of assets to partners, and (4) the termination of partnership affairs. |
| Usage Rank : | 19231 |
| Release : | 2023 |
| Version : | 1.0 |
| Prerequisites : | General understanding of federal income taxation. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
Partnership: Definition, How it Works, Taxation, and Types
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 08-Dec-2023 |
| NASBA Course Declaration : | Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam. |
| Approved Audience : | NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - 325 |
| Keywords : | Taxes, Partnership, Taxation, cpe, cpa, online course |
| Learning Objectives : |
As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 1 Introduction At the start of Chapter 1, participants should identify the following topics for study:
* Husband-wife partnerships * Limited partnerships * Co-tenancies & joint ventures * Partnership agreements * Family partnerships * Publicly traded partnerships * Advantages & disadvantages * Complete & partial exclusion elections * Loss & year limitations After reading Chapter 1, participants will be able to:
b. Identifying the liability of general and limited partners including how such liability might be contained; and c. Specifying the factors previously used to determine whether a business was a corporation or a partnership and the factors of the current check-the-box regulations. 3. Identify the complete or partial exclusion from partnership treatment under §761. Chapter 2 Partnership Income At the start of Chapter 2, participants should identify the following topics for study:
* Separately treated items * Deduction of losses * Partnership tax return * Special allocations * Limitations on the choice of a taxable year * Closing of the partnership tax year * Treating partner as a stranger * Guaranteed payments * Certain losses disallowed & sales at a gain After reading Chapter 2, participants will be able to:
2. Specify the types of separately stated partnership expenses identifying the character of such items and their deduction limitations, and recognize the §704(d) outside basis limitation and its impact on losses. 3. Determine whether a partnership can elect to amortize certain business-related expenses, and specify the elements and requirements of the partnership tax return and the items of deduction to which individuals are entitled. 4. Identify a partnership’s year taxable under §706(a) and the allocation of items of income and deduction from the partnership to the partners by:
b. Recognizing the availability of the natural business year including the §444 election as it relates to a partnership’s tax year identifying its costs and/or benefits; and c. Determining tax year termination and non-termination events for a partnership. Chapter 3 Contributions to Partnerships At the start of Chapter 3, participants should identify the following topics for study:
* Precontribution gain or loss property * Allocations as to contributed property * Character of subsequent gain or loss * Contribution of services * Original and adjusted basis of partner’s interest * Effect of liabilities on outside basis * Partner’s share of partnership liabilities * At-risk rule * Passive losses After reading Chapter 3, participants will be able to:
b. Identifying when the property taint rules apply and methods of allocation for precontribution gain or loss. 3. Specify the taxation of contributed services and strategies to avoid immediate taxation. 4. Determine the original and adjusted basis of an interest acquired by contributing property and/or money under §722. 5. Recognize a partner’s loss deduction when the limits on deductions of partnership losses apply by:
b. Specifying the buckets of income under §469 identifying the impact of passive loss rules. Chapter 4 Sales & Exchanges of Partnership Interests At the start of Chapter 4, participants should identify the following topics for study:
* Importance of capital treatment * Regulations on the gain on sale of pass-through entities * Exchanges & transfers * Unrealized receivables * Inventory * Liabilities of partnership * Inside basis after transfer of a partnership interest * Gifts * Abandonment or forfeiture After reading Chapter 4, participants will be able to:
b. Specifying the reasons why capital treatment is important and recognizing the impact of capital gain regulations on sales or exchanges of partnership interests; and c. Identifying the tax consequences of exchanges and transfers, and specifying partnership incorporation methods. 3. Specify optional basis adjustment provisions stating how they relate to the general rule for the inside basis after the transfer of a partnership interest, determine the tax consequences of making a gift of a partnership interest, and recognize the unique treatment of partnership interests that are abandoned or foreclosed on with or without related liabilities. Chapter 5 Partnership Distributions At the start of Chapter 5, participants should identify the following topics for study:
* Exceptions to the general nonrecognition rule * Partner’s interest * Nonliquidating & liquidating distributions * Special adjustment to basis & mandatory application * Holding period * Partnership property * Proportionate distributions * Disproportionate distributions * Effect of distributions of receivables or inventory After reading Chapter 5, participants will be able to:
b. Identifying a partner’s basis on either a liquidating or a non-liquidating distribution under §§732 and 733, and specifying instances when a partner may choose a special basis adjustment when receiving a distribution of property other than cash influences how the partner’s basis is determined; and c. Recognizing the tax consequences associated with proportionate and disproportionate distributions, particularly the effect of distributions of receivables or inventory. Chapter 6 Partnership Liquidations At the start of Chapter 6, participants should identify the following topics for study:
* Types of liquidating distributions * Section 736(a) payments * Section 736(b) payments * Distributions of unrealized receivables or inventory * Basis of distributed property * Gain or loss recognition * Basis adjustment after distributions * Election - §754 * Additional adjustments required by §754 After reading Chapter 6, participants will be able to:
b. Identifying the tax treatment of property distributions in liquidation permitting partnerships to distribute unrealized receivables or inventory. Chapter 7 Limited Liability Companies At the start of Chapter 7, participants should identify the following topics for study:
* Advantages of LLCs over C corporations * Advantages of LLCs over S corporations * Advantages of LLCs over limited partnerships * Advantages of LLCs over general partnerships * Disadvantages of LLCs * Uses * Federal tax consequences * Converting to an LLC from another form of entity * Local taxes on conversion After reading Chapter 7, participants will be able to:
b. Identifying the advantages that LLCs have over S corporations and the differences between an LLC and a limited partnership; and c. Cite the drawbacks of LLCs and their bearing on entity choice. 3. Recognize the federal tax consequences of establishing an LLC by:
b. Specifying whether an LLC member is at risk for recourse debt and determine the treatment of debt discharge income on an LLC; c. Identifying the passive loss rules and their association with LLCs and selecting an appropriate method of accounting for an LLC based on its characterization; and d. Determining how an LLC can designate a tax matters partner for audit purposes. |
| Course Contents : | Chapter 1 - Introduction Definition of Partnership Section 761(a) Factors Husband-Wife Partnerships Election for Husband & Wife Unincorporated Businesses Qualified Joint Venture Making the Election Duration Limited Partnerships Taxed as corporations Analysis Continuity Centralized management Transferability Limited Liability Ruling Policies Corporate General Partner Tax Shelters Check-the-Box Regulations Co-tenancies Definition of Trade or Business Joint Ventures Investment Clubs Partnership Agreement Modifications Partner’s Share of Tax Items Limited Partners Family Partnerships - §704(e) Capital Partnerships Gifts & Interfamily Sales Bipartisan Budget Act of 2015 Material Use of Capital Minor Children as Partners Non-Capital Partnerships Publicly Traded Partnerships - §7704 Exception Advantages Disadvantages Exclusion from Partnership Treatment - §761 Complete Exclusion Election Partial Exclusion Election Loss & Year Limitations Changing the Choice Chapter 2 - Partnership Income Partners Taxed as Individuals Self-Employment Tax Proposed Amendments to Limited Partner Regs Moratorium Exception - Separate Entity for Some Purposes Individual Returns & K-1s Partnership Expenses Paid By a Partner Separately Treated Items Character of Items & Limitations Deduction of Losses Outside Basis Limitation - §704(d) Loss Ultimately Deductible Effect of Losses on Outside Basis - §705 Partnership Tax Return Organization & Syndication Fees - §709 Capitalized Syndication Fees Business Start-up Costs - §195 Definition Filing Requirements Due Date of Return Failure to File Failure to Furnish Copies to Partners Special Allocations - §704(b) Economic Effect “Substantial Effect” Year Taxable - §706(a) Limitation on Choice of Taxable Year Required Tax Year Business Purpose - §706(b) Rev. Proc. 87-32 Highest Average Requirement 47-Month Exclusion Restrictions Form 1128 Section 444 Election Limitations on Changing a Tax Year Making the Election - Form 8716 Back-Up Election Required Payment When to File Termination of Election Closing of Partnership Year Events That Terminate Partnership - §708(b) Discontinuance of Business Winding Up Sale of 50% or More Interest Technical Termination Repealed Events That Do Not Close the Year - §706(c) Sale of Individual Partner’s Interest Death of Partner Buy/Sell Exception Change for Closing of Partnership Taxable Year Admission of New Partners - §706(d) Allocation Techniques Daily Allocation Required for Cash Items Transactions Between Partner and Partnership Treating Partner as Stranger - §707(a) Payments by Accrual Basis Partnership to Cash Basis Partner Guaranteed Payments - §707(c) Capitalization Prepaid & Capital Expenses - §707(c) Organization & Syndication Expenses - §709 Guaranteed Minimum Year Taxed - §706(a) Salary vs. Distribution Stranger Payment vs. Guaranteed Payment Payments Resulting in Loss Recipient of Salary as an “Employee” Exception Accident & Health Insurance Premiums Certain Losses Disallowed - §707(b) Two Partnerships Constructive Ownership Sales at Gain Chapter 3 - Contributions to Partnerships Contributions of Property - §721 Contribution vs. Disguised Disguised Taxable Exchanges - §704 & §737 Precontribution Gain or Loss Property Property Distribution to Contributing Partner - §737 Anti-Abuse Rules Under §737 Contributed Property Distribution to Another Partner - §704(c) Seven-Year Period (Formerly Five) Allocation Methods for Precontribution Gain or Loss Transfers to Investment Company Type Partnerships - §721(b) Contributed Assets Inside (Partnership) Basis - §723 Allocations as to Contributed Property - §704(c) Liabilities Earlier Optional Application of §704(c) Character of Subsequent Gain Taint On Contribution - §724 Character of Subsequent Loss - §724(c) Contribution of Services Basis of Partner’s Interest - Outside Basis Original Basis - §722 Adjustments to Basis Effect of Liabilities - §752 Deemed Distribution & Contribution Special Rule for Liabilities of Cash Basis Partnership Partner’s Share of Partnership Liabilities Limited partnerships Exception Guarantees Limits on Deduction of Partnership Losses At-Risk Rule - §465 Computation Exception for Real Estate Loans Qualified Persons Definition of Amounts At-Risk Passive Losses - §469 Three Buckets Material Participation Portfolio Passive Suspended Losses Fully Taxable Disposition Rental Real Estate Losses Application to Corporations Chapter 4 - Sales & Exchanges of Partnership Interests Capital Asset Treatment - §741 Corn Products Rule Importance of Capital Treatment Regs on Gain on Exchanges & Transfers Like-Kind Exchanges - §1031 Transfers to Controlled Corporations - §351 Partner’s Interest Basis Incorporation Methods Hot Assets - §751 Unrealized Receivables Depreciation Recapture Inventory “Inventory Items” “Substantial Appreciation” Elimination of Substantial Requirement Basis of §751 Property Tax Reporting & Notification Effect Liabilities of Partnership Inside Basis after Transfer of Partnership Interest General Rule - §743(a) Special Inside Basis Adjustment - §754 & §743(b) Allocation of Basis - §755 Death of Partner Basis Exception Permanency of Election Gifts Exceptions Abandonment or Forfeiture Chapter 5 - Partnership Distributions General Nonrecognition Rule - §731 Exceptions to General Rule Basis Adjustments Partner’s Interest - §733 Property Received - §732 Nonliquidating Distribution Basis Limitation - §732(a) Liquidating or Complete Distribution Allocation of Basis When Limited - §732(c) Partnership’s Basis Greater Than Partner’s Basis Partner’s Basis Greater Than Partnership’s Basis Special Adjustment to Basis Mandatory Application Holding Period - §735 Partnership Property - §754 & §734 Basis Allocation on Properties Distributed By a Partnership Distributions of Receivables or Inventory Proportionate Distributions Subsequent Disposition Rule Disproportionate Distribution - §751(b) Asset Allocation Gain or Loss Upon Distribution On Subsequent Basis for Property Received in Disproportionate Distribution Exceptions Effect Chapter 6 - Partnership Liquidations Flexible Treatment Types of Liquidating Distributions Liquidating Distributions of Money Section 736(a) Payments Section 736(b) Payments Effect Exclusions From §736(b) Treatment Liabilities Series of Payments Contingent Payments Distributions of Property in Liquidation Distributions of Unrealized Receivables or Inventory Liquidating Disproportionate Distributions Basis of Distributed Property Gain or Loss Recognition Basis Adjustment after Distributions Election - §754 Additional Adjustments Required by §734 Chapter 7 - Limited Liability Companies Introduction Check-the-Box Regulations LLC Benefits Advantages of LLCs over C Corporation Double Tax Basis Adjustment Special Allocations Contributions Liquidation Unreasonable Compensation Non-Tax Benefits Advantages of LLCs over S Corporations Advantages of LLCs over Limited Partnerships Outside Basis & Debt Share Advantage Substantial Economic Effect Rules - §704(b) Discharge of Indebtedness Income Advantages of LLCs over General Partnerships Disadvantages Uses Professional Firms Venture Capitalists Leveraged Buyouts - LBO Joint Venture Corporations Filing Consolidated Returns Foreign Investment Real Estate Ventures Charitable Investment Estate Planning Problem Uses Federal Tax Consequences Check-the-Box Regulations Self-Employment Tax Proposed Amendments to Limited Partner Regs - §1402 Moratorium At-Risk Rules - §465 Debt Discharge Income Passive Loss Rules - §469 Method of Accounting Audit Procedures TEFRA Rules Tax Matters Partner (TMP) Notice Additional Rules & Rights Bipartisan Budget Act of 2015 Centralized System Conversion of Partnership to LLC Conversion of S Corporation to LLC Conversion of C Corporation to LLC Local Taxes on Conversion Sales & Use Tax Real Property Taxes Real Property Transfer Taxes Entity Comparison Glossary |
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