Staff Training Part 5: Partnerships

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

We’ll introduce the Federal tax treatment of partnerships. This will include the “flow-through” nature of partnerships and how to “slice and dice” partnerships income into components that will be reported separately to each partner. We’ll cover the different types of partnerships (general partnerships, limited partnerships, and limited liability companies) and the adjusted basis that each partner has in their partnership interest (this is crucial for preparing 2020 tax returns which have new capital account reporting requirements).

Publication Date: August 2020

Designed For
Designed for tax professionals involved in federal tax planning or tax return preparation.

Topics Covered

  • Who Must File?
  • Late Filing Penalties
  • Types of Partnerships
  • Partnerships Great for Real Estate Rentals
  • Partnerships Great for Older Partners
  • Form 1065
  • Guaranteed Payments
  • K‐1s
  • Adjusted Basis Partnership Interest
  • Computing Basis Partnership Interest
  • Reporting Tax Basis Capital Accounts
  • New for 2020: Forms 1065
  • §705(b) — Projecting Out Partnerships Basis
  • Step‐Ups: Buyers of Partnership Interests
  • Section 754 Election
  • Scrubbing Depreciation: §754
  • "Adjusting" Basis for Distributions: §734
  • An Overview: CPAR
  • CPAR — The New Partnership Audit Rules
  • Off‐Ramp #1 — Electing Out of CPAR
  • Off‐Ramp #2 — Amended Returns or Pull‐In Procedure
  • Off‐Ramp #3 — The "Push‐Out" Election
  • The End of the Line: Imputed Adjustments
  • Partnership Representatives: What Could Possibly Go Wrong?
  • Self‐Employment Taxes
  • SE Tax and Real Estate Rentals
  • General Partners
  • Limited Partners
  • LLCs: Neither
  • SE Tax for LLCs and Case Law
  • SE Tax for LLC Members
  • IRS Informal Position: DCN PST/C/366_01_01‐01
  • Reporting Self‐Employment Income: Forms K‐1
  • Form 8825: Rental Real Estate

Learning Objectives

  • Identify tax items with special characteristics that must be reported separately to partners
  • Recognize how to compute self-employment income for different types of partners
  • Recognize how to compute the tax basis of partners in their partnership interests
  • Identify the late filing penalties in various client scenarios
  • Differentiate types of partnerships
  • Describe correct statements regarding guaranteed payments
  • Recognize special tax significance items is subject to AGI limits
  • Identify the correct formula for computing an adjusted basis in a partnership interest
  • Describe the exit ramps with respect to CPAR
  • Recognize which forms to use in various client scenarios
  • Identify how to fill out Form 1065

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
None

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $83.00

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