Speaker: Darryl Brown, EA, Ph.D.
This session and materials are critical for anyone who provides services to partners and partnerships. A recent Tax Court case held that the taxpayer could not deduct his distributive share of partnership losses because the taxpayer provided no evidence of basis in his partnership interests. The Courts (and the IRS) take the position that a partner’s basis is zero unless he can substantively prove otherwise.
Using real-life examples, this session will provide a comprehensive analysis of a partner’s outside basis from inception of the partnership including contributions of cash and property, assumption of liabilities, distributions, sales and exchanges, liquidations and redemptions, and the partner’s share of partnership liabilities. The session will culminate with a comprehensive example instructing participants on reconstructing a partner’s outside basis.
- Calculate the basis upon the contribution of property including the assumption of liabilities.
- Determine the effect, if any, on basis for distributions, liquidations, and redemptions.
- Understand how a partner’s basis is affected by the partnership’s liabilities.
- Utilize IRS and judicial guidance to reconstruct a partner’s outside basis.
- Evaluate planning opportunities to utilize basis maximally to avoid suspended losses.
Learning Level: Intermediate
Prerequisites: Basic understanding of basis.
Advance Preparation: None
CE Credit Hours:
- IRS: 2 hours Federal Tax Law Topics
- CTEC: 2 hours Federal Tax Law Topics
- CFP: 2 hours Tax Planning
- CPA/NASBA: 2 hours Taxes
- Attorney/CA Bar MCLE: 1.75 hours Taxation Law