Basis Calculations & Distributions for Pass-Thru Entity Owners Schedule K-1 Analysis

Overview

This comprehensive case-driven training is designed to get the accountant up to speed quickly in the area of basis calculations and distribution planning for the owners of pass-thru entities (i.e., S corporations, partnerships, and limited liability companies (LLCs)). The cornerstone of this course is the line-by-line analysis of the Schedule K-1s and how it affects the basis calculations. 

**Please Note:  If you need credit reported to the IRS for this IRS approved program, please download the IRS CE request form on the Course Materials Tab and submit to kori.herrera@acpen.com

Prerequisites

Basic understanding of individual income taxation

Objectives

• List the 3 main reasons for calculating a shareholder’s basis in a S corporation and partner/member’s basis in a partnership/LLC
• Calculate the stock and debt basis for S corporation shareholders
• Calculate the basis for partners and members of a LLC
• Calculate losses allowed from at-risk activities
• Review the Form 1120S and Form 1065 Schedule K-1s to determine how the line items affect basis calculations and get reported on the individual owner’s Form 104

Highlights

• Detailed coverage of any new legislation affecting basis computations and distributions and changes to the schedule K-1s (including the NEW Form 7203 – S Corporation Shareholder Stock and Debt Basis Limitations)
• Line-by-line analysis of the Schedule K-1s to determine how the items affect a S shareholder’s stock and debt basis and a partner/member’s outside basis and where the items get reported on Federal individual income tax return
• The three loss and deduction limitations on the owner’s individual income tax return (i.e. basis, at-risk and other Form 1040 limitations)
• How cash or non-cash distributions affect the basis calculations and whether or not they are taxable to the owners
• Compare the tax treatment of the sale of a shareholder’s stock in a S corporation and a partner’s interest in a partnership
• What constitutes debt basis for a S corporation shareholder under the final regulations
• The tax ramifications of repaying loans to S corporation shareholders and on open account debt
• How recourse and non-recourse debt effect a partner or member’s basis calculations and amount at-risk