RUSA READING, UNDERSTANDING, AND STRUCTURING THE ROADMAP: LLC AND PARTNERSHIP AGREEMENTS FROM A CPAS PERSPECTIVE
Preparation of Form 1065 and Schedules K-1 often requires the return preparer to understand the provisions of a partnership or LLC operating agreement. This workshop focuses on the provisions of an agreement or state law that can affect tax reporting and examines sample language used to achieve certain objectives. Accountants should proactively review agreements when a client is engaged, not only to identify any special provisions but also to determine missing provisions that should be brought to the attention of the principals to avoid tax issues down the road. This course provides critical information to tax practitioners who prepare partnership and LLC tax returns.
State law: what provisions apply when the agreement does not address an issue; what state law cannot be overridden by the agreement
Formation: how does the business handle liabilities?
Capital accounts: distinguishing book from tax; the consequences of differences
Distributions and distributive shares: not necessarily the same
Liability management: recourse or nonrecourse; how the investors can change the status
Allocations: Flip-flop, preferring the return of capital, and reduction of investor interest and augmentation of the promoter’s interest; structuring preferred returns, guaranteed payments, and special allocations; is a qualified income offset appropriate?
When investors change: deemed distributions; capital account and basis adjustments relate to agreement provisions
Review of the roadmap – a complete partnership agreement
Develop a checklist approach to review partnership and LLC agreements
Identify preparation planning for a partnership or LLC agreement
Designed For: CPAs who are responsible for helping structure an LLC or partnership, and CPAs who prepare tax returns for these entities Level of Knowledge: Advanced Prerequisite: Experience with partnership/LLC clients; an intermediate course in partnerships/LLCs Advanced Preparation: None Credits: 8 Field of Study: Taxes(8) CFP Credit: No