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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

    Tuesday, February 28, 2023

  • 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.

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

$347.00
CLE
CPE
ALL

The CLE/CPE course will review the tax issues involved with structuring purchase agreements for partnership or LLC interests. The panelist will address allocation of income gains and losses, allocation of the purchase price, payment terms in the purchase agreement, and the impact of current tax law and recent regulations, as well as discuss tax considerations from both the buy and sell sides.

Faculty

Mike Baker
Managing Partner
Baker Tax Law, LLC

Mr. Baker advises clients with respect to domestic tax matters and employee benefits and compensation. His clients include emerging companies, venture capital and private equity funds, and highly-compensated individuals.

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Description

The IRC Code provisions regarding the sale or transfer of a partnership or LLC interest are complex, and counsel representing both parties should have a thorough understanding of the income tax consequences of the transaction. Tax issues impact the negotiation, structure, and price of the deal terms.

Practitioners must consider a broad spectrum of buy- and sell-side issues, including evaluating the pros and cons of an asset sale vs. an entity sale. In the case of an asset sale, counsel must also understand the types of assets involved in the transaction.

Current tax law and other implications involved in structuring payment terms and deferred payment arrangements are significant. Counsel must assess the purchase price allocation, taking into account the tax implications of the price allocation and the different tax impacts on both the buyer and seller.

Listen as Mike Baker, J.D., LLM, Managing Partner at Baker Tax Law, outlines and analyzes the myriad of tax issues from the buyer's and seller's perspective when negotiating, structuring, and crafting the terms of a purchase and sale agreement in connection with the sale or transfer of a partnership interest.

Outline

  1. Asset vs. equity sale
    1. Amount of seller's gain or loss
    2. Character of seller's gain or loss
    3. Holding period issues
    4. State income tax
    5. Sales tax
    6. Real property transfer tax
    7. Real estate taxes
    8. COD on or after sale
    9. Abandonment
    10. Suspended 704(d) losses
    11. Suspended 465 at risk losses
    12. 1231 loss versus capital loss
    13. 1231 gain versus capital gain
    14. 1231 unrecaptured loss on MFJ return
    15. Partnership with built in loss
    16. Centralized partnership audit regime
  2. Tax implications for buyer and seller
    1. Buyer's cost basis and the Section 754 election
    2. Installment reporting for selling partner
  3. Allocation of the purchase price
    1. When required
    2. Strategies
    3. Sample provision
    4. Methodology
  4. Structuring payment terms
    1. Cash
    2. Rollover equity
    3. Compensatory amounts

Benefits

The panelist will review these and other crucial questions:

  • How can counsel and tax advisers guide clients in evaluating the pros and cons of an asset sale vs. an entity sale?
  • What are the tax issues to consider in allocating the purchase price?
  • What are the tax implications in structuring payment terms and deferred payments in connection with the sale of a partnership interest?
  • How does new tax law factor into negotiating and drafting purchase agreements for partnership and LLC interests?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Understand the tax issues involved in the purchase and sale of a partnership or LLC interest
  • Determine the allocation of income gain and losses and implications to buyer and seller
  • Discern the allocation of the purchase price and payment terms and impact on buyer and seller
  • Recognize critical factors to consider in purchase agreements under new tax law for partnership and LLC interests

  • 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, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of partnership tax rules, corporate structure, and partnership audit regulations

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).