Transactional Tax Basis Capital Reporting

Author: James R. Hamill

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 P8TIN card

Learn the Key Issues in Maintaining Tax Basis Capital Accounts

Partnerships must now report all partners’ capital accounts on a tax basis. After a few false starts, the IRS has settled on use of the “transactional” approach to tax basis capital accounts. This seems fairly simple at first impression. The entries for specific transactions are made on a tax basis. Capital falls out from these entries. However there are many transactions that present challenging interpretations for capital account reporting.

This course will examine the reasons for use of tax basis capital, as the reasons will allow a “logical” interpretation of how entries should be made. It will address basic transactions, but also issues such as reporting the effects of nontaxable transactions, opportunity zone investments, section 734 and 743 basis adjustments, distributions that trigger partner section 704(c) gain, and disguised sale transactions.

This two-hour CPE course, presented by James Hamill, CPA, Ph.D., presents an approach to dealing with transactions of a partnership that do not lead to an immediate answer to the proper tax capital reporting.

Publication Date: August 2025

Designed For
CPAs, EAs, return preparers, tax attorneys and other tax professionals who advise clients who may be subject to the passive loss rules or the NIIT will benefit from this insightful webinar.

Topics Covered

• Partnership Allocations
• Capital Account Maintenance
• Capital Account Reporting
• Some Preliminary Issues
• Transactional Capital
• Transactional Tax Basis Capital
• Partnership Section 734 Adjustments

Learning Objectives

• Identify the purpose of tax basis capital reporting
• Recognize how maintaining both book and tax capital can help in reporting transactions
• Determine how to approach reporting for specific transactions
• Describe which IRS form provides final guidance with respect to tax basis reporting is included in the instructions
• Identify within what time frame precontribution gain must be recognized if contributed property is distributed to another partner under Section 704(c)(1)(B)
• Identify on which partner schedule the IRS requires partnerships to report transactional tax basis capital accounts

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic understanding of federal income taxation.

Advance Preparation
None