Highlights

Key Topics

- Basic tax structure of partnerships and LLCs

- Electing to be taxed as a partnership: The "check-the-box" rules

- Tax consequences of partnership or LLC formation

- Partnership distributions

- Compensatory payments to partners

- At-risk and passive activity limits

- Profit and loss allocations: general rules and restrictions

- Reporting taxable income for partnerships and LLCs

Objectives

 Identify the effects of investor contributions and distributions on their basis in a partnership or LLC interest.

 Calculate the tax basis of assets transferred to a partnership or limited liability company (LLC) at formation.

 Recognize the tax consequences of a transfer of liabilities to a partnership or LLC in connection with property transfers at formation.

 Calculate the partner's or member's remaining basis in his or her interest following a distribution of cash or property from the partnership or LLC.

 Calculate the amount of the guaranteed payment when the partner is to receive the lesser of a fixed dollar amount or a fixed percentage of partnership income.

 Distinguish the difference between "book" allocations required under Section 704(b) and "tax" allocations required under Section 704(c).

 Identify the potential economic consequences to a partner or LLC member of a special allocation.

Location