Reviewing Partnership Agreements to Identify Key Tax Issues
Author: James R. Hamill
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2026 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Professional tax advisers use the partnership (or LLC) agreement to determine how to allocate items of income and loss and to identify other issues that may affect both tax compliance and planning considerations for the partnership and its partners. If the provisions of the agreement are ambiguous, the tax adviser is often forced to infer the intent of the agreement. How do you make your best shot at getting the taxation of a partnership right in such instances?
In this two-hour CPE course with nationally recognized tax expert and instructor James Hamill, CPA, Ph.D. will explain why, when and how to review a partnership agreement to assist the drafter with important tax issues that will arise during the life of the partnership. Dr. Hamill will also discuss how to identify transactions for which the agreement does not clearly identify the partners' economic deal. And, if you're lucky enough to get involved early in the process, you can learn to spot how many agreements do not clearly define terms, do not have clear cross references, or do not consider significant tax elections.
Publication Date: March 2024
Designed For
CPAs, EAs, tax preparers and other tax professionals with responsibility for review of partnership and LLC tax returns and planning for partnership tax entities.
Topics Covered
- Reviewing distribution provisions
- Reviewing allocation provisions
- Definitions, terminology, cross references
- Tax elections that should be considered
- Special tax issues that may need to be addressed
Learning Objectives
- Recognize the economic deal and how to ensure the agreement is consistent
- Identify key issues that should be in the agreement for allocation integrity
- Describe the common tax provisions and definitions that should be in the agreement
- Identify how to distinguish between profit/loss allocations and cash distribution shares
- Recognize when book basis can be useful
- Recognize reasons why a CPA should review the Partnership Agreement
- Describe Economic Effect
- Recognize suggestions offered by Section 704(c) regulations when specifying a method to allocate profits and losses
- Recognize when a new partnership-level audit regime takes effect
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
Experience with partnership taxation issues.
Advance Preparation
None
