Description
The most difficult concepts to master when dealing with flow-through business entities are the basis and distribution concepts. Major error and malpractice issues occur if the CPA does not fully understand the impact of these rules. This course is designed to focus on the practical applications of these rules.
Highlights
Applicable coverage of recent tax acts and any new legislation
Discuss a proposal for a yet to be developed new tax form, which
calculates basis, designed to be attached to individual returns
Executor’s new IRS form for disclosing basis in certain distributed
property; what about basis of a property distribution from a trust?
How §179 limitations affect basis & how tax-benefit rule is applied
Basis implications of personal assets converted to business use
Calculating basis of inherited qualified and joint tenancy property
S corporations: Beware of final IRS regulations regarding “open
debt”; determine how to calculate basis; worksheets are included;
understand the effect of stock basis & debt basis and IRS’s recent
focus on “at-risk basis” for shareholders; recognize how AAA
applies or not to S corporations; learn to apply the complex basis
ordering rules and special elections that can have a big tax result;
discuss loss limitation rules in depth; when you can have a taxable
dividend in an S corporation; understand distributions of cash and
property; understand the post-termination transition rules, which
will be important if (when) tax changes bring the return of C corps
LLCs and partnerships: Learn the detailed rules of §704 for
preventing the shifting of tax consequences among partners or
members; learn to calculate basis under §704 & for “at-risk” under
§465; recognize how recourse, nonrecourse, and qualified
nonrecourse debt can create significantly different tax results;
learn the difference between basis and “at-risk basis”; review §754
step-up in basis rules; the economic effect equivalence test or
“dumb-but-lucky” rule; learn to apply the complex rules of
distribution of cash vs. property
Objectives
Determine initial basis & organizing tax-free under §351 and §721
Understand what affects basis and how to treat distributions
Pas the four loss limitation hurdles to deduct pass-through losses
Designed For
CPAs who prepare both individual and flow-through business entity tax returns and need a thorough grasp of these significant issues. This course is a must for practitioners to help reduce and avoid this exposure to malpractice.