Preparing Form 1065: Part 1 (Currently Unavailable)

Author: Greg White

CPE Credit:  4 hours for CPAs
4 hours Federal Tax Related for EAs and OTRPs
4 hours Federal Tax Law for CTEC

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: December 2019

Designed For
Tax practitioners

Topics Covered

  • Changes to Form 1065
  • An overview of Form 1065 and its parts
  • What's a Partnership?
  • Rev. Rul. 75‐374
  • Spousal Partnerships
  • Real estate rentals as partnerships or LLCs
  • Taxable Years
  • Late filing penalties
  • Reasonable Cause
  • Partnership Terminations
  • Who Can Sign Form 1065?
  • Who Must File?
  • Elections: Who Makes Elections Partner or Partnership?
  • Other Matters
  • Other Activities
  • Issue 1b. Partnership Grouping Passive Activities
  • Wages to Partners
  • Medical Insurance Premiums: Partner
  • Codes: Principal Business and Product/Service
  • Form 1065, Page 2 Schedule B
  • Types of Partnerships
  • Advantages of Less and Full Reporting
  • "Adjusting" Basis for Distributions §734
  • §743 Step Ups Buyers of Partnership Interests
  • Sales of Partnership Interests
  • Like Kind Exchanges
  • §163(j) 30% Business Interest Expense Limit
  • Who's Subject to §163(j)?
  • Franklin Roosevelt The APA* and Tax Shelters
  • Computation of Limit (if Subject to §163(j))
  • Real Property Businesses: Electing Out of §163(j)

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 what you should first do if there is no majority interest tax year when picking a taxable year for a parternship
  • Recognize the requirements for a late filing penalty waived for reasonable cause
  • Describe correct statements with respect to late filing penalties
  • Identify the 2018 audit rate for partnerships based on the IRS Data Books
  • 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
  • Recognize a common adjustment deducted to arrive at ATI when computing the business interest expense
  • Identify advantages to not filing Form 1065
  • Identify reasons the IRS made changes to Form 1065
  • Recognize examples of elections made by a partnership and not by an individual partner
  • Describe after what date technical terminations have been eliminated for years
  • Differentiate which types of partners are allowed to sign Form 1065
  • Identify one of the four requirements that must be met for easier reporting
  • Describe partnership rules and how they apply to various scenarios

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
None

Advance Preparation
None

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