Overview

8.0 Credits
ONLINE

The most difficult concepts to master when dealing with flow-through business entities are the basis and distribution concepts. Major error and malpractice issues occur if a CPA does not fully understand the impact of these rules. Focus on the practical applications of these rules.

Objectives

  • Determine initial basis & organizing tax-free under 351 and 721
  • Understand what affects basis and how to treat distributions
  • Pass the four loss limitation hurdles to deduct pass-through losses

Major Topics

  • Applicable coverage of recent tax acts and any new legislation
  • Discuss a proposal for a yet to be developed new tax form, which calculates basis, designed to be attached to individual returns
  • Executor's new IRS form for disclosing basis in certain distributed property; what about basis of a property distribution from a trust?
  • How 179 limitations affect basis & how tax-benefit rule is applied
  • Basis implications of personal assets converted to business use
  • Calculating basis of inherited qualified and joint tenancy property
  • S corporations: Beware of final IRS regulations regarding "open debt"; determine how to calculate basis; worksheets are included; understand the effect of stock basis & debt basis and IRS's recent focus on "at-risk basis" for shareholders; recognize how AAA applies or not to S corporations; learn to apply the complex basis ordering rules and special elections that can have a big tax result; discuss loss limitation rules in depth; when you can have a taxable dividend in an S corporation; understand distributions of cash and property; understand the post-termination transition rules, which will be important if (when) tax changes bring the return of C corps
  • LLCs and partnerships: Learn the detailed rules of 704 for preventing the shifting of tax consequences among partners or members; learn to calculate basis under 704 & for "at-risk" under 465; recognize how recourse, nonrecourse, and qualified nonrecourse debt can create significantly different tax results; learn the difference between basis and "at-risk basis"; review 754 step-up in basis rules; the economic effect equivalence test or "dumb-but-lucky" rule; learn to apply the complex rules of distribution of cash vs. property

Prerequisite

Experience in business taxation

Advanced Preparation

None

Sessions

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Tuesday, May 14, 2019

General Sessions
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