Understanding How to Calculate Basis for LLCs, Partnerships and S Corporations (GBSS)

Pre-requistes:

Experience in business taxation

Knowledge Level:

Intermediate

Major Topics:

• How §179 limitations affect basis and how the “tax-benefit” rule is applied
• Applicable coverage of any basis considerations within the Tax Cuts and Jobs Act, or other recent tax legislation enacted before the presentation
• Discuss new pass-through basis calculations required as attachments to certain individual returns
• 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; review §754 step-up in basis rules; and learn how TCJA cleans up the basis treatment of charitable contributions and foreign taxes paid
• S corporations: Beware of final IRS regulations regarding “open debt” of S corporations; 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 does not apply to certain S corporations; learn to apply the complex ordering rules and special elections that can have a big tax result; become aware of when you can have a taxable dividend in an S corporation; understand distributions of cash and property and post-termination transition rules, and temporary new TCJA post-termination rules for eligible corporations

Learning Objectives:

• Discuss what affects basis and how to treat distributions
• Pass the loss limitation hurdles to deduct pass-through losses
• Determine initial basis and organizing tax-free under §351 and §721

Designed For:

CPAs who prepare both individual and flow-through business entity tax returns and need a thorough grasp of these significant issues