Surgent's Advanced Critical Tax Issues for Limited Liability Companies and Partnerships

Description

The purpose of this course is to provide an in-depth discussion of selected advanced-level issues affecting LLCs and LLPs.

Highlights

• Single-member limited liability companies as an alternative to subsidiaries
• Cancellation of indebtedness: rules and regulations
• How the IRS views members or partners for Social Security purposes
• Special problems when forming an LLC
• Debt issues and problems in structuring LLCs and LLPs, including loan guarantee issues, recourse and nonrecourse debt (and what the practitioner must explain to the client about refinancing and the potential gain issues), the at-risk basis rules, and new regulations restricting “bottom dollar” guarantees
• Distributions: is it just a disguised sale (and how can the practitioner be proactive, in some instances, in avoiding a disguised sale)? Regulations eliminate certain tax-deferred leveraged partnership transactions
• Death or retirement of a member or partner -- Understanding the alternatives and the options that a practitioner must explain to the client because of radically different tax consequences
• Step-up in basis issues – how to make the computations and elections, in particular the Section 754 election which can be revoked only with the permission of the IRS; the Section 754 election can be a two-edged sword and the practitioner must explain why to the client
• Property transactions between the LLC/LLP and its members or partners -- Inbound and outbound transactions: what to do with built-in gain or loss property
• Partnership losses: when are they deductible?
• Material participation rules for LLC members and limited partners: how they affect passive loss issues
• Continuation and termination of an LLC/partnership in the context of a merger or acquisition
• Sales of an LLC Interest -- holding period, and hot asset issues
• Impact of the tax on investment income on the sale of an interest in a partnership or LLC
• Section 199A, technical termination of partnership repealed; other issues under 2017 Act, including final regulations, which answer some of the questions not addressed by Section 199A itself, and issues which have arisen in the last year as Section 199A shakes itself out

Objectives

• Identify the tax and non-tax advantages and disadvantages of LLCs and partnerships
• Describe how inside and outside basis is affected by liabilities, recourse and nonrecourse
• Discuss the impact of cash and property distributions
• Explain the tax consequences of a sale of an interest and distinguish such consequences from the tax consequences when a partnership or LLC is acquired or merges into another LLC or partnership
• Complete the case study to improve advocacy skills before the IRS
• Answer the question: Whom does the practitioner represent, the partnership or LLC or a partner or a member and potential conflicts of interest?

Designed For

CPAs with clients using the LLC or LLP structure who need to understand advanced issues, problems, and planning strategies