Partnerships and S Corporations: How to Calculate Basis
EVENT DATE:
Aug 14,2024
PRESENTER(s): Joseph B. Darby
1:00 PM ET | 12:00 PM CT | 10:00 AM PT |
120 Minutes
This program has been approved NASBA & IRS CPE Credit 2(Taxes)
The IRS has recently increased the pressure on how to calculate and report partner and shareholder basis. Changes in the forms reflect these developments. This program provides a detailed analysis of the calculations related to determining tax basis for a partnership interest and S Corporation shareholder shares and loans. How to use the Form 1065, Schedule K-1 and Form 1120S, Schedule K-1 information for basis determination. Illustrated examples with filled in forms will demonstrate how the processes works and their many potential pitfalls.
This course reviews accurate reporting, correcting, and reconstructing for partner and S corp shareholder basis. Including two very common matters affecting S corp shareholder and partner basis related to how business ERTC refunds and PPP loans were reported on the entity tax returns.
This two-hour course will discuss basis calculations for S-Corps and Partnerships, as well as capital accounts and partnerships. Basis calculations are tricky for practitioners, because basis is actually an individual/Form 1040 concept — individuals are responsible for determining their basis. However, all of the items necessary for making this computation are generated at the S-corporation or partnership level. This training focuses on the numbers necessary to make basis calculations, and what those calculations actually impact. In additions, partnerships now have a requirement to report capital accounts under the tax basis of accounting. Capital accounts ARE an entity requirement (unlike basis). This course will cover how to determine capital accounts, and what a capital account affects.
Area Covered in this session:
- Form 7203, S corp Shareholders Basis
- Calculation of basis when the entity is formed, including the impact of contributed property
- IRS rules for partners capital accounts and basis
- Explains the use of both "inside" and "outside" basis determination
- Clarifies the how partnerships and S
- Explain the differences of basis between S-Corporations and Partnerships to clients.
- Apply basis correctly on personal tax returns.
- Understand Partnership Capital Accounts and their affects.
Learning Objectives:
- Identify the tax issues related to LLC members/partners basis from formation through operations and concluding with sale and/or liquidation
- Identify the tax issues related to S Corporation owner's basis for shares and loans from formation through operations and concluding with sale and/or liquidation
- Understand potential pitfalls and planning strategies
- Understand basis basics for shareholders, partners, & LLC members
- Develop best practices for correcting or reconstructing basis if needed
- Properly handle basis calculations for asset contributions or distributions
- Determine tax practitioners' exposure and responsibilities related to basis
Credits and Other information:
- Recommended CPE credit – 2.0
- Recommended field of study – Taxes
- Session Prerequisites and preparation: None
- Session learning level: Basic
- Location: Virtual/Online
- Delivery method: Group Internet Based
- NASBA Sponsor: 146439
- IRS Course ID: PJGWS-T-00076-23-O
- Attendance Requirement: Yes
- Session Duration: 2 Hours
- Case Studies and Live Q&A session with speaker
- PowerPoint presentation for reference
Who Should Attend?
- CPA, EA, attorney, and staff
- Tax department
- CFOs and controllers
- Accounts payable and accounting managers
- Public accountants
- Sole Proprietors
Coder Archives is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.
Speaker Profile:
Joseph B. Darby III has more than thirty years of experience representing clients in a wide range of tax, estate planning, and related business matters. His goal is to help clients enjoy their lives by reducing taxes, avoiding (or resolving) problems with taxing authorities, and passing personal wealth to the appropriate next destination.
Jay's clients range from individuals to large public and private business entities, and while he has structured some of the most sophisticated transactions in the business arena, he is mindful of the fact that people rather than businesses ultimately pay taxes. Therefore, he always structures transactions with the goal of minimizing the tax costs and maximizing the after-tax return for the people he represents.
An early proponent of Opportunity Zones (an investment incentive created under the 2017 Tax Act), Jay has become one of the country’s go-to experts in the area, helping clients bring business investment and ultimately prosperity to some of the most challenged areas of the country.
