Surgent's Handbook for Mastering Basis, Distributions, and Loss Limitations Issues for S Corporations, LLCs and Partnerships

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Overview

8 Credits
IN-PERSON

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.

Objectives

Participant will be able to determine initial basis and organizing tax-free under §351 and §721; understand what affects basis and how to treat distributions and pass the four loss limitation hurdles to deduct losses

Major Topics

  • Applicable coverage of the tax acts of 2012 and any new legislation
  • S Corporations: beware of recent Final IRS Regulations regarding “Open Debt”; determine how to calculate basis. Worksheets are included; understand the effect of stock basis and debt basis and IRS’s recent focus on ‘at-risk basis’ for shareholders; recognize how AAA applies or doesn’t apply 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 and understand the post-termination transition rules, which will be of great importance if (when) future tax changes bring the return of the C corporation
  • LLCs and Partnerships: learn the detailed rules of §704 for preventing the shifting of tax consequences among partners or members; determine how to calculate basis under both §704 and 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 and the planning strategies and find out how “hot assets” can change the game for distributions

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.

Prerequisite

Experience in business taxation

Sessions

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Monday, November 10, 2014

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