Preparing Form 1065: Part 1 (Currently Unavailable)

Author: Greg White

Form 1065 is critical for partnerships as it is used to help partners determine their own tax filings. It’s not, necessarily, a form that is required to pay taxes because partnerships are not taxed at the partnership level. Or, are they? Beginning with the 2018 tax year, there is a possibility the IRS could audit a partnership and assess tax as “imputed underpayments.” The Centralized Partnership Audit Regime (CPAR) has changed the landscape for tax professionals and stepped up the due diligence and work necessary to file Form 1065 properly. Careful work on the 1065 could even make sure your partnership clients are not subject to some of the more surprising and harsher elements of the CPAR. In the first part of a two-part Form 1065 self-study program, experienced tax practitioner and instructor Greg White, CPA, will walk you through the necessary concepts you must understand to file Form 1065. This program discusses how partnerships are treated by the IRS, what is necessary to file Form 1065, and the basic concepts of partnership and partner taxation that apply to passthrough entities including partnerships and LLCs.

Publication Date: January 2019

Designed For
Tax practitioners

Topics Covered

• An overview of Form 1065 and its parts
• Definition of a partnership
• Types of partnerships including LLCs
• Spousal partnerships
• Qualified joint ventures
• Real estate rentals as partnerships or LLCs
• Filing requirements
• Late filing penalties and possible abatements
• Partnership terminations
• Accounting methods
• Carried interest
• Partnership elections
• Income and deductions
• Wages to partners
• Guaranteed payments
• Proper use of codes on Form 1065
• Schedule K
• Schedule B
• Sec. 734 adjustments
• Sec. 743
• Bonus depreciation and partnerships
• Like-kind exchanges and partnerships—Sec. 1031 does not apply!
• Centralized Partnership Audit Regime (CPAR)
• Electing out of CPAR
• Designation of "Partnership Representative"

Learning Objectives

• Describe the taxation of partnerships and LLCs
• Recognize and apply the various sections of Form 1065
• Explain the Centralized Partnership Audit Regime
• Describe how to properly designate a partnership representative
• Differentiate correct statements regarding the trends in the type of entity from 1995 to 2017
• Identify requirements with respect to the election to be treated as a qualified joint venture
• Recognize advantages and disadvantages of filing Form 1065
• Identify how to pick the proper taxable year for a partnership
• Recognize the requirements for a late filing penalty waived for reasonable cause
• Describe situations which illustrate technical termination of a partnership
• Identify the form requirements for a partnership to file in order to change accounting methods
• Differentiate examples of an election made by partners instead of a partnership
• Identify a type of other expense included on Line 20 of Form 1065
• Recognize which type of arose after the 1980s energy and real estate meltdowns
• Describe correct statements regarding Section 754 step-up
• Identify which of the following IRS Forms provides an election to opt out of the CPAR requirements
• Recognize after what date technical terminations have been eliminated
• Describe which types of partners are allowed to sign Form 1065 beginning after 2017
• Recognize examples of elections made by a partnership and not by an individual partner
• Identify who makes a Section 901 Foreign Tax Credit Election
• Differentiate types of partnerships and the necessary elections
• Identify the four requirements that must be met for easier reporting
• Describe CPAR rules and how they apply

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
None

Advance Preparation
None