CPE: 8 hours
Prerequisites: General knowledge in partnership taxation.
Advanced prep: None
Who should attend: Attorneys; CPAs who prepare forms 1065, 568, 565 and Schedule K-1 for partnerships and LLCs; and CPAs who prepare partner income tax returns (forms 1040 or 1120) and advise partners on tax-smart strategies.
This second of two partnership courses taught by Gary McBride turns to sales of partnership interests, current and liquidating distributions to partners, death of a partner, and mergers, divisions and terminations of the partnership. Competing concerns of the partners are emphasized: the selling partner and the buyer, the liquidated partner and the continuing partners, etc. Opportunities presented by IRC 754 elections will be fully explored. Form 1065 preparer reporting obligations and partner capital account impact are stressed throughout.
Important current developments are highlighted including the recently proposed regulations on partnership distributions involving hot assets, and guidance on the NIIT.
Course materials include a fully linked 19 chapter e-book, which serves as a research resource for both partnership courses taught by Gary McBride. PPT slides are used extensively to reinforce concepts and the PPT slides are available to attendees.
- Outline the fundamental rules governing sales of partnership interests.
- Determine the competing concerns of the seller and buyer.
- Recognize how the buyer and continuing partners can benefit from an IRC §754 election.
- Determine the tax impact of distributions—current and liquidating, including the new rules for disproportionate distributions involving hot assets.
- Identify the impact of the IRC §754 election on the distributee and the continuing partners.
- Recognize the unique conflicts related to the retirement of a partner.
- Recall the income tax rules triggered by the death of a partner.
- Outline the Form 1065 Schedule L and K-1 reporting obligations and capital account impact for sales and distributions.
- Define strategies involving partnership mergers and divisions.
- Sale of a partnership interest: seller's side
- Buyer and beneficiary adjustments for inside/outside basis differences.
- Proportionate partnership distributions—current and liquidating.
- Disproportionate partnership distributions, emphasizing new IRS guidance.
- Special treatment of retired parters.
- Income tax rules relating to the death of a partner
- Mergers, divisons and partnership terminations.