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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Law

Date & Time
  • event Date

    Thursday, May 21, 2020

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

$347.00
CLE
CPE
ALL

This CLE/CPE course will guide tax professionals on the tax issues stemming from partnership non-cash property distributions. The panel will discuss critical issues in structuring non-cash property distributions, key exceptions, questions in applying Sections 751, 704(c), 707, 731(c), 737, and 752, and other items to avoid tax liability on distributions.

Faculty

Benjamin W. Hager
Partner
Taft Stettinius & Hollister LLP

Mr. Hager's practice includes the areas of business entity formations, mergers and acquisitions, reorganizations, operational tax issues and tax-efficient restructuring and exit strategies. A substantial part of his practice involves joint ventures, limited liability companies and partnerships, including within the context of venture capital, private equity and real estate equity funds.

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Martin E. Mooney
Member
Frost Brown Todd

Mr. Mooney practices in the individual and business tax areas and has extensive experience representing partnerships, limited liability companies, and corporations on issues ranging from formation to exit strategies, including reorganizations, mergers, acquisitions, redemptions, and consolidated return issues. Clients in his business practice range from sole proprietors to publicly held companies.

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Description

One of the primary advantages of conducting business as an entity taxed as a partnership is the ability to make non-cash property distributions with no tax liability. However, tax professionals must recognize circumstances that can trigger gain recognition and, if possible, use methods to avoid any unintended tax liability.

Generally, partnership distributions of non-cash property do not result in recognition of gain. The application of complex rules, such as those regarding hot assets, disguised sales, marketable securities, and other provisions must be considered by tax counsel and advisers to avoid triggering gain.

Listen as our panel discusses critical issues for partnership non-cash property distributions. The panel will also offer practical guidance in structuring distributions to avoid gain recognition.

Outline

  1. Non-cash property distributions in corporations vs. partnerships
  2. Critical issues in structuring non-cash distributions
    1. Sec. 751(b) hot asset rules
    2. Sec. 707(a)(2)(B) disguised sale rule
    3. Triggering gain on distributions of contributed property: Secs.704(c) and 737
    4. Marketable securities; Sec. 731(c)
    5. Reduction in liability share under Sec. 752(b)
  3. Best practices in structuring non-cash partnership distributions to avoid gain recognition

Benefits

The panel will review these and other key issues:

  • How do non-cash distributions differ in a corporation vs. a partnership?
  • What are the principal issues in structuring non-cash partnership distributions?
  • What issues are presented under Sec. 751(b) hot asset rules?
  • How can you ensure that a transaction avoids the application of Sec. 707(a)(2)(B) disguised sale rules?
  • What rules apply to distributions of contributed property and marketable securities?
  • How can gain recognition be triggered if the exchange of property results in a reduction of a partner's share of liabilities?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Discern the tax impact of non-cash distributions in corporations and partnerships
  • Recognize the critical tax issues in structuring non-cash partnership distributions
  • Identify issues presented under Sec. 751(b) hot asset rules as applied to non-cash distributions
  • Determine the applicability of disguised sale rules to non-cash distributions
  • Ascertain effective methods to ensure the avoidance of gain recognition triggers in non-cash distributions

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, drafting complex partnership agreements and schedules, supervising other attorneys or tax advisers. Specific knowledge and understanding of partnership structure, operating agreements and liquidation, including partner capital accounts, allocation and distributions; familiarity with the economic effect test; safe-harbor and non-safe harbor partnership agreements according to IRC 704.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.