Disregarded Entities: Now You Don't See Them, Now You Do

Author: Bradley Burnett

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2026 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

What is a disregarded entity (DE)? It is a business entity that is generally disregarded from its owner for federal income tax purposes, but not disregarded for (some or all) other purposes. If an entity is "disregarded" for federal income tax purposes, it may be "regarded" for other federal tax and state law purposes. Yes, indeed, a plethora of exceptions to being "disregarded" exist. This unexpected, eye opening course capably explores and drills into what the tax planner, tax preparer and taxpayer must know about the disregarded entity rules and exceptions to them.

Publication Date: May 2024

Designed For
CPAs, professionals in industry, tax planners and taxpayers desiring to maximize the asset protection features and minimize the tax disadvantages of business entity structure.

Topics Covered

• What Is a Disregarded Entity?
• What Does "Disregarded" Mean?
• Now You Don't See Them, Now You Do
• Disregarded Entity (DE) Definition
• Disregarded Entities - Three Types
• Disregarded Entities Not Disregarded For All Tax Purposes
• Disregarded Entities Don't Follow the Beaten Path
• FinCEN Beneficial Ownership Interest Reporting Hot Spot - Single Member LLCs
• Disregarded or Regarded?
• DE Thinking Process
• DEs - Why Do We Care?
• Tax Consequences of Being a DE
• Tax Recognition of Entity Disregarded for Income Tax Purposes
• DEs - Employment Taxes
• DEs - Taxpayer ID Numbers (TINs)
• Disregarded Entities - 2023 Form 1065 and K-1
• Backup Withholding
• FEIN Number for an Individual
• Tax Recognition of Entity Disregarded for Income Tax Purposes
• DEs - Husband and Wife Owned Entities
• Interaction of DEs With Various IRC Code Sections
• DEs - Income Tax Rates and 199A
• DEs in Mergers and Consolidations
• Comparison - QSubs vs. SMLLCs
• Changing Classification from C Corp to Disregarded Entity
• DEs - State Law Liability Issues
• DE Thinking Process

Learning Objectives

• Recognize how to analyze and detect when an entity is disregarded and when it is regarded
• Identify how to take advantage of the differences between the same entity being regarded in some contexts and disregarded in others for maximum asset protection and tax savings
• Identify how many owners a disregarded entity has under the check-the-box regulations
• Identify the year the new CPAR was effective, and replaced the prior TEFRA rules
• Identify the type of arrangement that saves the employer share of employment taxes

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None