Advanced Partnership Taxation Concepts

Author: Greg White

Partnerships are the fastest growing type of business entity. Understanding the finer points of tax preparation and planning for partnerships is a key part of all tax practices.

In this course, we’ll cover sophisticated strategies to keep you on the cutting edge, including self-employment tax for LLC members, allocating losses of limited liability companies, and admitting new partners in the most tax efficient manner.

Publication Date: December 2021

Topics Covered

• When should self-employment earnings be reported for an LLC member?
• Claiming bonus depreciation on §743 step-ups from purchases of partnership interests
• Avoiding the IRS's dangerous CPAR audit rules
• Transferring profits interests in partnerships without triggering taxation to new owners
• Allocating losses to LLC members under §704(b)
• Claiming bad debts for partner loans
• Deducting interest on loans made to purchase partnership interests or make loans to partnerships

Learning Objectives

• Identify partnerships that are able to elect out of the CPAR (centralized partnership audit regime)
• Recognize how to report self-employment earnings for LLC members
• Identify partnership clients that are eligible to elect out of the dangerous new IRS audit rules for partnerships (CPAR)
• Compute bonus depreciation on the purchase of a partnership interest
• Identify the number of ways to allow spouses to avoid CPAR treatment
• Recognize which type of entity had the greatest increase in returns filed from 1995 to 2013
• Identify the second step in the purchase and sale of real estate
• Identify the best option with respect to CPAR Partnerships audit rules
• Describe the three reasonable methods proposed by the Treasury, with respect to problems with §704(c)
• Recognize a type of SSTB where certain wage and property limits apply with respect to QBID
• Identify the phase-in range for single filing jointly taxpayers with respect to QBID
• Recognize which type of partnership expense payments is treated as a contribution to the partnership
• Identify a method of allocation between land and building

Level
Advanced

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
Basic understanding of partnership taxation.

Advance Preparation
None