Tax Fundamentals of LLCs and Partnerships - Tax Staff Essentials

Overview

Most U.S. businesses are formed as a pass-through entity, which includes partnerships. If you are new to the subject, or if you have worked in this area for years but need a quick review, this course will provide a firm grasp of the fundamental concepts, help you to build a strong foundation of knowledge, and freshen up your analytical skills. Talking about tax can sometimes sound like you're speaking a foreign language in front of your clients. You can leverage the tone of the course materials to explain complex issues with accuracy and confidence.

Prerequisites

None

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 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 their 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 between "book" allocations required under Section 704(b) and "tax" allocations required under Section 704(c).
• Identify the potential economic consequences of a special allocation to a partner or LLC member.

Highlights