HMBI
SURGENT MCCOY’S HANDBOOK FOR MASTERING BASIS,
DISTRIBUTIONS, AND LOSS LIMITATION ISSUES
FOR S CORPORATIONS, LLCS, AND PARTNERSHIPS
The most difficult concepts to master when dealing with flow-through business entities are the basis and distribution concepts. Major error and malpractice issues occur if the CPA does not fully understand the impact of these rules. This course is designed to focus on the practical applications of these rules. Major Topics
- Applicable coverage of the tax acts of 2010 and any new legislation enacted before the presentation
- S Corporations:
- Beware of recent Final IRS Regulations regarding “Open Debt” of S Corporations
- Determine how to calculate basis. Worksheets are included.
- Understand the effect of stock basis and debt basis and IRS’s recent focus on ‘at-risk basis’ for shareholders
- Recognize how AAA applies or does not apply to certain S corporations
- Learn to apply the complex ordering rules and special elections that can have a big tax result
- Review K-1s and understand the practical issues of how to determine basis
- Discuss loss limitation rules in depth
- Become aware of when you can have a taxable dividend in an S corporation
- Understand distributions of cash and property and post-termination transition rules
- Learn how the passive loss rules can create other problems
- LLCs and Partnerships:
- Understand the significant differences that can occur in calculating basis for an LLC vs. a partnership
- Learn the detailed rules of §704 for preventing the shifting of tax consequences among partners or members.
- Determine how to calculate basis. Worksheets are included.
- Recognize how recourse, nonrecourse, and qualified nonrecourse debt can create significantly different tax results
- Learn the difference between basis and “at risk basis” and what it means
- Review §754 step-up in basis rules
- Discuss inside vs. outside basis and optional basis adjustments
- Learn to apply the complex rules of distribution of cash vs. property and the planning strategies
- Find out how “hot assets” can change the game for distributions
- Review K-1s and understand the practical issues of how to determine basis
Designed For: CPAs who prepare both individual and flow-through business entity tax returns and need a thorough grasp of these significant issues. This course is a must for practitioners to help reduce and avoid this exposure to malpractice.
Level of Knowledge: Intermediate |
