Description

Many tax clients with losses from their S corporations, partnerships, and multiple-member LLCs treated as partnerships will want to use these losses to offset their other income from other sources. This program explains when, why, and how the at-risk rules apply to allow or to prevent the owner of a pass-through entity from taking a loss from a pass-through entity and using it to offset other income. This program is extremely helpful for anyone with pass-through entity clients.

Target Audience

Any tax practitioner wishing to understand the at-risk rules and how they apply to losses allocated to the owners of pass-through entities

Course Objectives

• Understand how a client determines his or her at-risk basis in his or her pass through entity
• Understand how the at-risk basis calculation differs from a regular basis calculation
• Calculate the amount of an investor's annual at-risk basis
• Understand the structure of IRS Form 6198 and how it relates to calculating a taxpayer's at-risk basis

Subjects

• Basis and at-risk basis
• How to calculate the amount of annual at-risk basis
• Forms 6198 and 7203
• When activities may be aggregated for at-risk purposes
• Qualified nonrecourse financing

Prerequisites

A basic understanding of the tax rules relating to partner basis and S corporation shareholder basis