Partnership Basis: Inside & Outside (Completed)

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Partnership basis calculations, inside and outside are current IRS targets and offer substantial tax savings for partner loss utilization and reducing tax on excess distributions or on the sale of a partnership interest. Both the individual and the business tax preparer need strong basis reporting skills related to the many components of basis; allocating profit, losses, and other Schedule M-1 adjustments, partnership contributions, loans to the partnership, loan guarantees, distributions, partner benefits, sale of a partnership interest, distributions of partnership assets and more. Basis is the first of four loss limitations a partner is subject to before benefiting from pass-through losses on their individual taxes, if the basis is wrong the partner may miss a valid pass-through loss, overpay taxes on distributions or on the sale of a partnership interest, and may even have a weaker position when negotiating a partnership buy out and possibly be exposed to compliance and audit risk.

Who Should Attend
Business and individual tax practitioners with partnership or partner clients.

Topics Covered

• Partnership inside and outside basis
• Basis for new partners
• Affect of contributing or distributing assets to partners
• Distributions in excess of basis
• Basis as a loss limitation
• Basis as a loss limitation
• Remedies for incorrect basis

Learning Objectives

• Calculate and track accurate inside and outside partnership basis
• Develop tax strategies to maximize utilizing pass through losses
• List and discuss the items which make up basis from initial investment to the final buy out
• Maintain important worksheets to substantiate basis records or re-construct missing basis records
• Understand the tax implications of contributing or taking assets out of the partnership

Level
Basic

Instructional Method
Group: Internet-based

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None