Basis/Distributions for Pass-Through Entities: Simplifying the Complexities

Description

The IRS is scrutinizing, more closely than ever, the basis owners have and the transactions for which the computation of basis is required. This course addresses the rules used to determine basis for partnerships and S Corporations, and puts the computation of basis in contexts that often come under scrutiny - loss limitations, distributions, and sales of an interest, among others. Learn the crucial rules for computing the adjusted basis and the tax treatment of distributions from pass-through entities, such as partnerships and S Corporations. Focus on the computation of the basis and the at-risk amount for these entities. Become familiar with correct allocation of liabilities among partners, the types and amounts of income that can result from distributions and sales of interests, and the basis of assets distributed from pass-through entities.

Highlights

  • Structuring cash and property distributions to avoid unexpected tax consequences
  • Adjusting basis in partnership assets to save future taxes
  • Measuring the gain or loss on the sale of an interest in a partnership or S Corporation
  • Minimizing recognition of ordinary income on sale of an interest
  • Maximizing the amount of the pass-through losses deductible by the partner/shareholder

Objectives

  • Calculate the basis of a partnership interest or S Corporation stock ownership.
  • Determine the amount and the character of income or loss the partner or shareholder should recognize, in the event of distributions of property or money.
  • Apply the basis, at-risk, and passive activity loss limitations to pass-through losses from partnerships, LLCs, and S Corporations.
  • Determine the tax treatment of sales of either partnership interests or S Corporation stock.
  • Calculate the basis of partnership or LLC property following certain distributions and transfers of interests in the entity.

Designed For

CPA firm managers, partners, and other tax practitioners who advise clients concerning issues related to the computation of pass-through entity basis, loss limitations, sales of interests and distributions



Leaders

Joseph Sanford

Joseph Sanford is President and CEO of Sanford & Company, P.A. located in Fort Smith, Arkansas. While involved in all aspects of the firm, he focuses his efforts in estate planning, litigation support, management consulting, and technology consulting. He also frequently serves as a moderator for various tax, accounting, technology, and ethics continuing education seminars for CPAs. Sanford received his BSBA from the University of Arkansas with a major in accounting and a minor in computer sciences in 1977. Sanford has been a practicing accountant since 1977. Prior to establishing his own firm, he worked as a manager at a large local CPA firm, which was merged with a much larger regional firm. This provided the catalyst for him to establish his own firm, Sanford & Company, P.A., in 1988. He is a member of the AICPA and the Arkansas Society of CPAs (ASCPA), the chair of the ASCPA Continuing Education Committee, past chair of the ASCPA Ethics Committee, and past chair of the ASCPA Quality Review Committee. He is also a member and past president of the Western Arkansas Estate Planning Council, past vice president of ASCPA, and past president of the Western Chapter of the ASCPA. Sanford is a frequent speaker at CPE seminars and conferences and received the ASCPA Discussion Leader of the Year Award for 2012 and 2017.