Partnership Preparation, Basis Calculations and Distributions: Form 1065 Schedule K & K1 Analysis | 4203577A

Description

Get up to speed quickly on partnership and LLC formation, as well as preparation issues and calculating a partner's and LLC member's basis. Take a line-by-line analysis of Form 1065 Schedule K and K-1 and how these items affect the partner's or member's individual income tax return. Each attendee will receive a comprehensive reference manual that includes practice aids and real-world examples and case studies.

Highlights

Emphasize any new legislative changes affecting partnerships and partners
Review the Form 1065 to learn how income statement items get reported on the partnership/LLC tax return (i.e., page 1 versus Schedule K) and flow-thru to the partner/members on Schedule K-1
Analyze the Schedule K-1 line-by-line and discuss where the items get reported on the individual's Federal income tax return and how the items affect the partner/member's outside basis
Look at what relevant information related to the 3.8% net investment income tax needs to be reported to the partners/members
Formation issues including the mandatory allocation of the §704(c) pre-contribution gain or losses back to the contributing partner/member
The purpose of tax and §704(b) book capital account
Reporting recourse and non-recourse debt on the Schedule K-1
Tax ramifications and reporting of cash and non-cash distributions including disproportionate distributions of "hot assets"
Overview of the §754 election for optional basis adjustments triggering §743 (transfer of interests) and §734 (distributions)

Objectives

Be able to form a partnership and calculate its initial inside basis in the assets and partner's outside basis in the entity.
Prepare a basic partnership (Form 1065) Schedule K including reporting of cash and non-cash distributions.
Determine how Schedule K items get allocated to partners/members on their individual Schedule K-1.
Identify the three main reasons for calculating a partner's or member's basis in a partnership/LLC.
Calculate a partner's tax basis capital account (as required on the 2020 form 1065)
Calculate a partner's or member's outside basis and determine if losses and deductions are limited on their individual income tax return.

Designed For

Tax professionals who need an in-depth training course on tax preparation issues, basis calculations, reporting of tax basis capital accounts and distributions rules for partnerships, LLCs and their owners.