- NY Credits : 2.0
- TX Credits : 2.0
- IRS Enrolled Agent Credits : Federal Tax/Tax Related Matters - 2.0
Form 1065 - Partner's Capital Accounts and Share of Income or Loss
Most practitioners deal with Form 1065, U.S. Return of Partnership Income, on a regular basis. This program takes a look at the analysis of partners' capital accounts, including Item L on Schedule K-1, Schedule M-2, book versus tax capital accounts, partner allocations, how to account for changes in a partner's interest in the partnership, partner and partnership reporting requirements, consolidated audit proceedings, the at-risk and passive activity rules, the IRC Sec. 179 deduction, the rules under IRC Sec. 707(a) and (b) that limit the losses between related partner and nonpartner transactions, partnership allocations, the various partnership allocation tests that must be met in order for a partnership allocation to be respected, gain/loss and income chargebacks, minimum gain chargeback, and the safe harbor rules for allocation of nonrecourse deductions.
Upon successful completion of this course, the user should be able to:
identify various methods of maintaining partner capital accounts,
recognize the purpose of Schedule M-2 in maintaining capital account balances,
determine and recognize the difference between book and tax capital accounts,
recognize how partnership flow-through concepts are affected by specific deduction limitations and specific classes of taxpayers,
determine whether allocations have substantial economic effect,
recognize the implications of consolidated audit proceedings,
define material participation,
recognize the limitations on related party and nonpartner transactions,
recognize the tests that must be met in order for a partnership allocation to be respected, and
recognize what is conceptually required to meet the safe harbor maintenance rules.