• videocam Live Webinar with Live Q&A
  • calendar_month July 14, 2026 @ 1:00 PM ET/10:00 AM PT
  • signal_cellular_alt Intermediate
  • card_travel Tax Preparer
  • schedule 110 minutes

Correcting Capital Account Errors on Partnership Returns

A Comprehensive Guide to Corrections, Allocations, and True-Ups of Capital Accounts

Early Bird Pricing!
MSRP
$197.00
$167.45
Save $29.55

Discount expires 6/30/26

This course is $0 with these passes:

CPE
ALL
  1. keyboard_arrow_leftBack

About the Course

Introduction

This course will provide tax professionals and advisers with an in-depth and practical guide to the accounting and tax disclosure requirements to correct and adjust capital account balances. The panel will focus on reconstructing capital accounts, reporting of negative tax basis capital accounts, and the required reporting of all tax basis capital accounts. The webinar will also cover the interpretation of partnership agreements and guide advisers on applying partnership provisions to corrective entries and tax disclosures.

Description

The maintenance of capital accounts is one of the more challenging tasks for tax professionals advising partnerships. Due to inexperience, changes in advisers, and errors and omissions, capital accounts are often not maintained accurately. Absent corrections and adjustments, such items can lead to misallocation, phantom income, and basis errors. This, coupled with the IRS requirement to report all partners' beginning and ending tax basis capital, has left tax practitioners with the burden of reviewing or determining tax basis capital for all partners.

Even more frustrating is that the corrective adjustments to bring the accounts back into balance are not always clear. These issues become more apparent under the BBA centralized partnership audit regime.

By its very nature, partnership accounting is complicated, and some transactions and events will cause difficulties in maintaining capital accounts. Some provisions—including allocations of nonrecourse liabilities, minimum gain chargebacks, and multistate filings—can create problems for tax professionals. Advisers must be able to identify and correct capital account discrepancies from both compliance and reporting standpoints.

Listen as our experienced panel provides an overview of common and uncommon capital account errors and scenarios that need corrective measures and explains the best steps to take when calculating partners' capital accounts, considering the new IRS reporting requirements.

Presented By

John Alfonsi, CPA
Partner
Prosperity Partners LLC

Mr. Alfonsi brings over 40 years of experience in tax and advisory services, focusing his practice on business valuation, economic damages, and tax planning and consulting for pass-through entities. He is a recognized financial expert in federal and various state circuit courts across the country. In his spare time, Mr. Alfonsi is an adjunct professor at his Alma Mater, teaching master’s degree courses in taxation and valuation.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio
Joseph Mandarino
Shareholder
Polsinelli

Mr. Mandarino's practice focuses on corporate, tax and finance law. He is involved with a wide variety of businesses and transactions, including experience with compliance, planning and M&A activities for partnerships, individuals and corporations. Mr. Mandarino’s practice also includes representation in tax controversy work. He writes and speaks extensively on a wide range of business, tax and finance topics.

expand_circle_down Expand to View Full Bio expand_circle_up Collapse Bio
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).

Date + Time

  • event

    Tuesday, July 14, 2026

  • schedule

    1:00 PM ET/10:00 AM PT

I. Partnership agreement interpretation

II. Required reporting of tax basis capital

III. BBA audit rules and their effect on capital accounts

IV. Identifying capital account misstatements

V. Book entries

VI. Tax reporting and disclosures

VII. A case study with illustrations

The panel will discuss these and other critical issues:

  • Identifying errors, miscalculations, or misstatements in capital accounts
  • Determining and reporting tax basis capital
  • Basis and capital account corrections where a valid Section 754 election was in place
  • Book vs. tax-corrective adjustments
  • Prior year adjustments
  • Impact of partnership audit rules

Learning Objectives

After completing this course, you will be able to:

  • Distinguish book capital accounts from tax capital accounts
  • Determine how to use the transactional approach to calculate annual partnership capital account changes
  • Understand how the IRS will treat imputed underpayments
  • Identify capital account maintenance rules and errors in maintaining capital accounts
  • 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. Specific knowledge of partnership taxation, accounting and tax disclosure requirements, capital account maintenance, correcting capital account mistakes and partnership audits; familiarity with book and tax corrective adjustments, compliance post-TEFRA, and substantial economic effect.

BARBRI, 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

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

BARBRI CE webinars-powered by Barbri-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .