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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Thursday, September 21, 2023

  • schedule Time

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

  • timer Program Length

    110 minutes

Credit Information

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

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will give tax professionals preparing Form 1065 tax returns a detailed review of the requirements for capital account maintenance for partnerships and LLCs, including a general outline of tax allocations, mathematical examples, explanations of operating agreements, and approaches to compliance. Our panel will discuss the nuances of negative basis capital accounts, reporting partners' share of net unrecognized Sec. 704(c) gain or loss, and handling other common but complicated reporting scenarios.

Faculty

Brian T. Lovett
Partner
Withum Smith + Brown, PC

Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses, including all aspects of tax compliance for partnerships and corporations. He advises clients with regard to the structure and tax consequences of new business ventures, and assists with restructuring existing businesses for increased tax efficiency. Prior to joining his firm, he was with a “Big 4” accounting firm, working closely with large, multinational real estate investment companies.

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Faye Tannenbaum
Partner
Mazars, LLP

Ms. Tannenbaum has over 28 years of experience providing tax compliance and consulting services to some of the largest entities operating within the United States, including private equity companies, banks, broker-dealers and investment management entities.  

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Description

Tax advisers and practitioners preparing Form 1065 Partnership Income Tax Returns are frequently required to interpret a host of provisions in operating agreements and tax regulations that mandate the maintenance of detailed capital accounts.

If tax professionals fail to review and apply operating agreement provisions properly, they risk incorrectly using critical partnership tax rules and creating results that are inconsistent with the business deal intended by the partners or LLC members. This, coupled with the required tax-basis capital reporting requirements, adds even more complexity to this cumbersome calculation.

Traditionally, most operating agreements required a layering approach to capital account maintenance. In recent years, the "targeted capital account" method appears in more and more operating agreements. This method, based on cash-driven distributions, often is less prone to error.

Listen as our experienced panel provides detailed guidance on interpreting and reporting the capital account provisions in operating agreements and methods available to comply with complex tax regulations.

Outline

  1. A general overview of tax allocation principles and substantial economic effect
  2. The traditional layered approach to allocating income
  3. Targeted capital account approach to allocating income
  4. Allocations for hedge funds and commodity funds
  5. Tax-basis capital and 704(c) gain-loss reporting requirements
  6. IRS and other taxing authorities' views on targeted allocations

Benefits

The panel will review these and other key issues:

  • What are the critical tax allocation principles for capital accounts?
  • What is the impact of "substantial economic effect" requirements in making capital account allocations?
  • How should tax pros handle liquidating distributions and deficit capital account restoration?
  • What is the best approach for determining and maintaining tax-basis capital accounts for partners?
  • What are the various approaches and challenges to special allocations taken by the IRS and other taxing authorities?

NASBA Details

Learning Objectives

Upon completing this webinar, you will be able to:

  • Distinguish book capital accounts from tax capital accounts
  • Identify critical tax allocation principles for capital accounts
  • Determine the impact of substantial economic effect requirements in making capital account allocations
  • Establish that liquidating distributions and deficit capital account restoration requirements are handled correctly
  • Ascertain the Form 1065 reporting requirements
  • Recognize the advantages of using the targeted capital account method

  • 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+ preparing complex tax forms and schedules, including familiarity with Form 1065 or newer tax preparers and associates working under the supervision and guidance of a tax professional experienced in preparing Form 1065. Specific knowledge of partnership and LLC agreements and the impact that those agreements have on the maintenance of capital accounts, exposure to targeted capital accounts, as well as the traditional layering approach to capital account maintenance.

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.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).