As they gain more experience, staff are expected to take on more complex assignments with minimal supervision. The course is designed to be a step above a mere preparation seminar, including a deeper study into critical areas of formation, special allocations of income and deductions, basis calculations and implications of recourse and nonrecourse debt, basis step-up under ยง754 on transfer of an ownership interest, distributions, self-employment tax issues, and termination/liquidation of the LLC.

Major Topics:

  • Applicable coverage of recent tax acts and any new legislation enacted before presentation
  • Detailed rules of §704 for preventing the shifting of tax consequences among partners or members
  • Unreasonable uses of the traditional and curative allocation methods
  • Multiple layers of §704(c) allocations
  • Business situations that qualify as are partnerships, and others that do not
  • Treatment of recourse versus nonrecourse debt basis
  • How to calculate basis limitations and its implication on each partner’s own tax return
  • How §179 limitations affect partnership/LLC basis
  • Regulations for handling basis step-ups under §754 elections, and mandatory adjustments under §743 and §734 for partnerships who have NOT made the §754 election
  • Subsequent contributions of property with §754 adjusted basis to another partnership or corporation
  • Capital account adjustments in connection with admission of new member
  • To make special allocations, the regulations require substantial economic effect, what are the requirements?
  • LLCs and self-employment tax to the members
  • Distributions – current or liquidating, cash or property including the substituted basis rule
  • Termination/liquidation of an LLC
  • Is there a “flexible standard of law” regarding closely held entities?

Learning Objectives:

  • Prepare more complicated partnership returns
  • Understand certain advanced concepts of partnership taxation

Designed For: Experienced CPAs desiring a comprehensive case approach to understand reasonably complex limited liability company issues and problems; also, CPAs who want a comprehensive, intermediate-level limited liability company practice manual
Level of Knowledge: Intermediate
Prerequisite: Experience in business taxation
Advanced Preparation: None
Credits: 8