Basis Calculations & Distributions for Pass-Through Entity Owners

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Overview

8.0 Credits
ONLINE

Get up to speed quickly with this comprehensive case-driven training course which focuses on basis calculations and distribution planning for the owners of pass-thru entities (i.e., S corps, partnerships and LLCs). Take a line-by-line analysis of the Schedule K-1 and how it affects the basis calculations. Hands-on methodology, real-world examples and cases are used to demonstrate the complex income tax code and regulations to enhance the learning experience. 

Objectives

  • Identify the three main reasons for calculating a shareholder’s basis in a S corp and partner/member’s basis in a partnership/LLC.
  • Calculate the stock and debt basis for S corp shareholders.
  • Calculate the basis for partners and members of a LLC.
  • Calculate losses allowed from at-risk activities.
  • Review the Form 1120S and Form 1065 Schedule K-1s to determine how the line items affect basis calculations and get reported on the individual owner’s Form 1040.

Major Topics

  • Emphasize any new legislation affecting owners of pass-through entities.
  • The four loss and deduction limitations on the owner’s individual income tax return (i.e., basis, at-risk, passive and excess business loss limitations).
  • How cash or non-cash distributions affect the basis calculations and whether or not they are taxable to the owners.
  • Compare the tax treatment of the sale of a shareholder’s stock in a S corporation and a partner’s interest in a partnership.
  • What constitutes debt basis for a S corp shareholder under the final regulations.
  • Tax ramifications of repaying loans to S corp shareholders and on open account debt.
  • How recourse and non-recourse debt affect a partner or member’s basis calculations and amount at-risk.

Designed For

Tax professionals.

Prerequisite

Basic understanding of individual income taxation.

Advanced Preparation

None.