Course Learning Objectives
Chapter 1 Introduction
Learning
Objectives
After
reading Chapter 1, participants will able to:
1. Determine what constitutes a
partnership for federal income tax purposes under §761(a) by:
a. Recognizing factors for partnership
existence identifying co-tenancy status, husband-wife partnerships and the
correct reporting of income and loss;
b. Identifying the liability of
general and limited partners including how such liability might be contained;
and
c. Specifying the factors previously
used to determine whether a business was a corporation or a partnership and the
factors of the current check-the-box regulations.
2. Recognize the impact of
partnership agreements on partners’ shares of tax items, specify the
requirements of §704(e) for family partnerships, and cite the pros and cons of
partnerships to determine when the entity choice is appropriate.
3. Identify the complete or partial
exclusion from partnership treatment under §761.
Chapter 2 Partnership
Income
Learning
Objectives
After
reading Chapter 2, participants will able to:
1. Recognize the allocation of income
and deduction among partners, identify when a partnership or its partners are
subject to income or estimated tax, determine what constitutes §1402
self-employment taxes, and specify instances where partnerships are viewed as
separate entities.
2. Specify the types of separately
stated partnership expenses identifying the character of such items and their
deduction limitations, and recognize the §704(d) outside basis limitation and
its impact on losses.
3. Determine whether a partnership
can elect to amortize certain business-related expenses, and specify the
elements and requirements of the partnership tax return and the items of
deduction to which individuals are entitled.
4. Identify a partnership’s year
taxable under §706(a) and the allocation of items of income and deduction from
the partnership to the partners by:
a. Specifying instances when a
partnership generally must conform its tax year to its partners’ tax years and
the least aggregate deferral of income for each partner whose tax year is
different from other partners;
b. Recognizing the availability of
the natural business year including the §444 election as it relates to a
partnership’s tax year identifying its costs and/or benefits; and
c. Determining tax year termination
and non-termination events for a partnership.
5. Identify transactions between a
partner and a partnership as being between a stranger and a partnership or as
guaranteed payments.
Chapter 3 Contributions
to Partnerships
Learning
Objectives
After
reading Chapter 3, participants will able to:
1. Recognize the tax-free
capitalization rules of §721 by:
a. Specifying the differences between
a contribution and a sale or exchange recognizing the treatment of transfers to
investment company type partnerships; and
b. Identifying when the property
taint rules apply and methods of allocation for precontribution gain or loss.
2. Determine a partnership’s basis
for contributed assets under §723.
3. Specify the taxation of
contributed services and strategies to avoid immediate taxation.
4. Determine the original and
adjusted basis of an interest acquired by contributing property and/or money
under §722.
5. Recognize a partner’s loss
deduction when the limits on deductions of partnership losses apply by:
a. Determining amounts at risk under
§465; and
b. Specifying the buckets of income
under §469 identifying the impact of passive loss rules.
Chapter 4 Sales
& Exchanges of Partnership Interests
Learning
Objectives
After
reading Chapter 4, participants will able to:
1. Determine capital asset treatment
on the sale or disposition of a partnership interest under §741 by:
a. Recognizing whether the Corn
Products Rule applies and the reasoning behind the determination;
b. Specifying the reasons why capital
treatment is important and recognizing the impact of capital gain regulations
on sales or exchanges of partnership interests; and
c. Identifying the tax consequences
of exchanges and transfers, and specifying partnership incorporation methods.
2. Recognize the tax treatment of a
sale or exchange of a partnership interest where the partnership possesses hot assets (unrealized receivables and
inventory), and identify the impact of partnership liabilities in computing
both the amount realized on a sale of a partner’s interest and the adjusted
basis of the sold interest.
3. Specify optional basis adjustment
provisions stating how they relate to the general rule for the inside basis
after the transfer of a partnership interest, determine the tax consequences of
making a gift of a partnership interest, and recognize the unique treatment of
partnership interests that are abandoned or foreclosed on with or without
related liabilities.
Chapter 5 Partnership
Distributions
Learning
Objectives
After
reading Chapter 5, participants will able to:
1. Determine the treatment of
distributions of cash or property by a partnership to the partners by:
a. Recognizing the general nonrecognition
rule under §731 and specifying exceptions to this general rule;
b. Identifying a partner’s basis on
either a liquidating or a non-liquidating distribution under §§732 and 733, and
specifying instances when a partner may choose a special basis adjustment when
receiving a distribution of property other than cash that influence how the partner’s basis is determined;
and
c. Recognizing the tax consequences
associated with proportionate and disproportionate distributions, particularly
the effect of distributions of receivables or inventory.
Chapter 6 Partnership
Liquidations
Learning
Objectives
After
reading Chapter 6, participants will able to:
1. Determine ways to liquidate a
retiring partner’s interest by:
a. Recognizing the types of
liquidating distributions and specifying the character and treatment of cash
distributions under §736; and
b. Identifying the tax treatment of
property distributions in liquidation permitting partnerships to distribute
unrealized receivables or inventory.
2. Identify a withdrawing partner’s
basis when there are distributions in liquidation or in nonliquidation, and specify the requirements of a §754 election
identifying additional adjustments required.
Chapter 7 Limited
Liability Companies
Learning
Objectives
After
reading Chapter 7, participants will able to:
1. Determine the taxation of limited
liability companies recognizing the variety of tax entity choices and their
advantages and disadvantages by:
a. Specifying the advantages and disadvantages of an LLC recognizing the advantages
of LLCs over C corporations;
b. Identifying the advantages that
LLCs have over S corporations and the differences between an LLC and a limited
partnership; and
c. Cite the drawbacks of LLCs and
their bearing on entity choice.
2. Identify ways to use an LLC and
their business-planning opportunities, and specify business ventures that
should avoid LLCs.
3. Recognize the federal tax
consequences of establishing an LLC by:
a. Determining the role of
check-the-box regulations in the entity characterization and identifying
self-employment tax regulations and their application to LLC members;
b. Specifying whether an LLC member
is at risk for recourse debt and determine the treatment of debt discharge
income on an LLC;
c. Identifying the passive loss rules
and their association with LLCs and selecting an appropriate method of
accounting for an LLC based on its characterization; and
d. Determining how an LLC can
designate a tax matters partner for audit purposes.
4. Identify the dangers and tax
consequences in converting to an LLC from another form of entity, and recognize
the potential assessment of sales and use tax, real property taxes, and real
property transfer taxes on entities on conversion to an LLC.