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CPE Self-Study

Tax Fundamentals of LLCs and Partnerships - Tax Staff Essentials

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    Tax Fundamentals of LLCs and Partnerships - Tax Staff Essentials Online Access Product #: 157674
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    Non-Member: $249.00
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Is LLC and partnership taxation new to you or do you need a quick refresher of the fundamental concepts? The course addresses the tax consequences of the most common transactions engaged in by LLCs and partnerships. Develop a level of comfort with the basic conceptual framework underlying partnership and LLC taxation, with an emphasis on explaining the tax consequences associated with issues that are most frequently confronted by tax practitioners.

Learning Objectives

This course will prepare you to do the following:

  • Recognize the basic differences between the various types of partnerships and LLCs.
  • Identify the effects of investor contributions and distributions on their basis in a partnership or LLC interest.
  • Determine how partnerships and LLCs opting to be treated as partnerships report their federal taxable income to the IRS and to investors.
  • Indicate how investors in partnerships and LLCs report their shares of entity income and loss for tax purposes, and how those shares affect the basis of their investments in the entity.
  • Calculate the tax basis of assets transferred to a partnership LLC at formation.
  • Recognize the tax consequences of a transfer of liabilities to a partnership or LLC in connection with property transfers at formation.
  • Identify the required tax year for a partnership or LLC.
  • Determine the tax consequences associated with the exchange of an interest in a partnership or LLC for services.
  • Distinguish between current and liquidating distributions.
  • Determine the basis in the investor's hands of property received as a distribution from a partnership or LLC.
  • Calculate the partner's or member's remaining basis in his or her interest following a distribution of cash or property from the partnership or LLC.
  • Indicate the effects of liabilities assumed by a partner or LLC member in connection with a property distribution.
  • Determine the proper tax treatment of retirement payments to a partner.
  • Determine whether payments to a partner will be treated as guaranteed payments, distributive shares, or payments to a third party.
  • Identify the tax treatment of payments to a partner in his or her capacity as a third party.
  • Recognize the tax treatment, both at the partner and the partnership level, of guaranteed payments to a partner.
  • Calculate the amount of the guaranteed payment when the partner is to receive the lesser of a fixed dollar amount or a fixed percentage of partnership income.
  • Indicate the correct treatment of partnership income by a partner for self-employment tax purposes.
  • Determine whether special allocations called for in a partnership agreement will be allowable under the Section 704(b) regulations and when they will not be recognized by the IRS.
  • Distinguish the difference between "book" allocations required under Section 704(b) and "tax" allocations required under Section 704(c).
  • Identify the potential economic consequences to a partner or LLC member of a special allocation.
  • Recognize the relationship between partnership and LLC allocations of profit and loss and the allocation of the risks and rewards of entity operations.
  • Identify the types of special allocations that are allowed in a family partnership context and those that are not.

Key Topics

  • Basic tax structure of partnerships and LLCs
  • Tax consequences of partnership or LLC formation
  • Partnership distributions
  • Compensatory payments to partners
  • Profit and loss allocations: general rules and restrictions

Who Will Benefit?

  • Public accounting staff, seniors, supervisors, and tax professionals in company finance or tax departments

Discounts

Tax Section Members Receive Additional Savings!

When you log into this website with your AICPA member user account, the section/credential discount will be automatically applied during checkout. Should you have any questions or encounter any issues, please contact the AICPA Service Center at 888-777-7077 or service@aicpa.org.

Find out more information on the Tax Section.

Table of Contents

System Requirements

About the Authors

Larry Tunnell, Ph.D., CPA

Robert Ricketts, Ph.D., CPA

Robert Ricketts is the Director of the School of Accounting in the Rawls College of Business at Texas Tech University. He has been a member of the Accounting faculty since 1988 and has held the Frank M. Burke Chair in Taxation since 1999. Prior to earning his Ph.D., which he received from the University of North Texas in 1988, he worked for the Dallas office of Ernst & Whinney (now Ernst & Young) as a tax senior.

Ricketts' tax scholarship addresses a broad audience. He co-authors several courses on partnership taxation for the AICPA, and a forthcoming book on comparative taxation written by an international group of authors. He also contributes chapters to a leading undergraduate textbook on taxation, and has numerous academic publications on issues ranging from the risks of over-reliance on tax software to the response of multinational corporations to tax holiday legislation. He teaches at both the undergraduate and graduate levels, and works extensively with doctoral students. His love for students, and for Texas Tech, is well-known by students, colleagues and alumni across the world.

About the Publisher

AICPA

About the AICPA The American Institute of CPAs is the world’s largest member association representing the accounting profession, with more than 412,000 members in 144 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, and offers specialty credentials for CPAs who concentrate on personal financial planning; forensic accounting; business valuation; and information management and technology assurance. Through a joint venture with the Chartered Institute of Management Accountants, it has established the Chartered Global Management Accountant designation, which sets a new standard for global recognition of management accounting.

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