Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 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
Partnerships allow partners to reach an agreement with respect to the allocation of items of income, gain, deduction, and loss — provided the agreement has substantial economic effect. Regulations finalized in 1985, at the height of the tax shelter days, provide several “safe harbors” to the structure of allocations that comply with the economic effect test. These regulations require that the partnership liquidate based on capital accounts and have largely driven the form of most partnership agreements.
After the passive loss rules eliminated the classic tax shelter arrangement, many advisors looked for alternative structures that focused on how partners would distribute money and property, and then use the distribution arrangement to determine allocations of partnership items. These arrangements are often called “targeted” allocations as they use allocations to hit a target capital account. The agreement itself does not prescribe a particular allocation scheme, but instead forces the tax return preparer to make allocations that tie capital to the agreed-to distribution scheme.
Partnership tax experts believe one of three things about targeted allocations. They work. They do not work. They may work. This course will discuss the reasoning behind each position. The presenter believes they may work if properly structured.
Join nationally recognized tax practitioner, instructor and commentator James Hamill, CPA, Ph.D., for this two-hour CPE course that provides a practical review of how to make partnership allocations based on a targeted allocation agreement. This course makes liberal use of specific examples to illustrate the “how to” of targeted allocations.