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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Corporate Tax

Date & Time
  • event Date

    Thursday, August 1, 2024

  • 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.

$247.00
CPE
ALL

This course will discuss states' pass-through entity (PTE) taxation regimes and when and how to elect PTE taxation in applicable states, as well as analyze the ultimate taxation of owners to mitigate taxes paid.

Faculty

Richard W. Spengler
National Technical Leader - State & Local Tax
BDO USA

Mr. Spengler's main area of focus is state income and franchise taxes with significant experience in the design and implementation of legal entity structures that are more tax efficient. As a result of his unique background, he has had success in designing structures that both minimize the impact on his client’s operations while maximizing the tax savings received by the client. Mr. Spengler specializes in the design of structures that both complement the client’s underlying business and provide diversified tax savings. As such, he has successfully designed structures for clients that simultaneously reduce state income tax, Single Business Tax, franchise tax, sales & use tax and federal income tax while logically fitting within the way the business operates. In addition to restructuring work, Mr. Spengler also has significant experience with the analysis of tax return positions and with the subtle interaction between the Federal income tax framework and its impact on a client’s state income tax reporting. He has had a great deal of success with securing significant refunds for clients related to gray and misunderstood areas of the tax law.

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Kimberly Capizzi
Managing Director, State & Local Tax
BDO USA

Ms. Capizzi works in the firm’s State and Local Tax Practice with more than 12 years of experience in public accounting, serving a wide array of clients, ranging from individuals to publicly traded corporations. She focuses much of her time on multistate organizations, including complex multi-tiered partnerships, ensuring clients meet all compliance requirements and deadlines. Most of Ms. Capizzi’s clientele are flow-through entities and she is well versed in the state tax issues specific to such entities. Additionally, Ms. Capizzi assists corporations and flow-through entities in designing and implementing structural enhancements to generate long-term state tax reductions and reduce state tax compliance requirements.

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Description

This course will discuss states' pass-through entity (PTE) taxation regimes and the various traps that PTEs and their owners can fall into, and how to avoid them. Almost all of the states have enacted PTE taxes in response to the 2017 Tax Act, which added a $10,000 cap on deductible state and local taxes paid by individuals. The enactment of these PTE taxes has created significant complexity because of the subtle differences in the mechanics inherent in the different PTE taxes. These subtle differences can cause a PTE and/or its owners to fall into the trap of paying more in Federal income and/or state taxes if state PTE elections are made.

Richard W. Spengler, National Technical Leader for State and Local Tax at BDO USA and Kimberly Capizzi, Managing Director in State and Local Tax at BDO USA will cover PTE taxation methods, examples of common PTE taxation scenarios, and key caveats to consider before electing PTE treatment in states where payment of the tax is elective. Listen as our panel of state and local tax experts use a case study approach to address the issues that are commonly encountered with state PTE taxes.

Outline

  1. Background
  2. Mandatory PTE taxation
  3. Elective PTE taxation
  4. Specific state taxation regimes
  5. Analyzing the impact of PTE taxation on owners
  6. Best practices

Benefits

The panel will cover these and other critical issues:

  • When does the PTE and/or the owners have to include a state tax refund in Federal gross income?
  • When should the PTE deduct the state PTE taxes for Federal income tax purposes?
  • Can an owner of a PTE get allocated the ‘incorrect’ amount of the PTE tax expense?
  • What happens to the owner’s tax benefit when the owner of a PTE has suspended losses?
  • Should a PTE with trust owners make state PTE elections?
  • Can an interest expense limitation under IRC Section 163(j) cause more state tax to be paid if state PTE elections are made?
  • When a PTE sells its business are there circumstances where state PTE elections should not be made?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify situations where state PTE tax elections should be avoided
  • Determine when and how much an owner or PTE needs to include in Federal income from a state tax refund
  • Differentiate how the various traps are impacted in states that provide the owners a deduction vs. the states that provide PTE owners a credit
  • Determine the correct year that the state income tax deduction should be taken for Federal income tax purposes
  • Recognize the interaction of the federal PTE tax deduction and the business interest limitation of IRC 163(j)
  • Identify when negative tax consequences will occur when a PTE sells its business and makes state PTE tax elections

  • 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 preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of SALT taxation, nexus and apportionment as it applies to multi-state businesses.

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.