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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

    Friday, December 20, 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.

  • 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 examine the complexities of related party transactions for tax advisers working with closely held businesses and their owners. The panel will explain when imputed interest is required, when it is recognized by the payor and payee, when loss deductions are disallowed versus deferred, and steps tax professionals can take to identify and properly report these affiliated transactions.

Faculty

Marcus E. Dyer
Principal, Team Leader of Tax Controversy
Withum Smith + Brown, PC

Mr. Dyer manages and reviews all aspects of federal and state tax compliance for C-corporation, S corporation and partnership returns, including consolidated C-corporation returns. He advises businesses on a wide array of tax matters including but not limited to reorganizations and employee benefits. He manages and reviews all aspects of the preparation of high net worth individual returns and conducts tax research on federal and state tax issues. He also handles tax controversies, including at the examination, appeals and collections stages.

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John P. Barrie
Partner
McLaughlin & Stern, LLP

Mr. Barrie graduated from UCLA with a BA in Political Science, from University of California – Hastings College of Law, with a JD, and New York University, with a Master of Laws in Taxation.  He is admitted to practice in New York, California, District of Columbia and Missouri.  After serving as an Attorney-Advisor to Judge Leo H. Irwin, United States Tax Court and engaging as a partner in an international law firm for over 25 years, he joined McLaughlin & Stern as a partner and chair of the Tax Practice Group, in 2022.  His practice involves all phases of both a federal and SALT tax controversy tax practice as well as an extensive domestic and cross-border tax transactional practice.

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Dean L. Surkin
Professor (Adjunct)
Pace University Graduate School of Business

Mr. Surkin is an attorney engaged in private practice in the New York metropolitan area. He recently retired from the position of Tax Director at a regional CPA firm based in New York City. Prior to that, Mr. Surkin was a partner at Surkin & Handlin, a boutique firm that handled real estate and tax matters. He is a tax attorney with broad-based experience in tax planning and research, has litigated major cases in the fields of taxation, probate and general commercial matters, and has been peer-reviewed by Martindale-Hubbell. Mr. Surkin holds the highest rating for legal ability and ethical standards, AV. His published articles on tax law have appeared in peer-reviewed journals, practitioners’ journals, and the popular press. Mr. Surkin also writes science-fiction short stories about the adventures of his granddaughters and their dog visiting historic events in their uncle’s time machine (their uncle is also a dog) and serves on the Board of Directors of the Westchester Community Orchestra.

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Description

IRC Section 267(a)(1) states, "No deduction shall be allowed in respect of any loss from the sale or exchange of property, directly or indirectly, between persons specified in any of the paragraphs of subsection (b)... ." IRC Section 267(b) includes family members, individuals owning more than 50 percent of an entity's stock--directly or indirectly--and a fiduciary or grantor of a trust. These rules disallow loss deductions on otherwise bona fide, arms-length transactions between specific related parties.

Loans between owners and their businesses have always been prevalent. With the steep rise in interest rates, mandated related party interest amounts that could be deemed immaterial in the past are no longer. More concerning than the imputed income that could be assessed is the worry that loans could be reclassified as dividends or disproportionate distributions. Tax practitioners working with closely held businesses need to thoroughly understand the workings and requirements of IRC Section 267 and its interplay with Section 7872 for related party transactions.

Listen as our panel explains references to Section 267 in the Code and how it alters loans, sales, and other undertakings between related parties.

Outline

  1. Related parties and IRC Section 267
  2. Related parties under IRC Section 267(b)
  3. Related party loans
    • Imputed interest
    • Interplay with IRC Section 7872
    • Application of NIIT, IRC Section 1411
    • Ramifications of noncompliance
  4. Related party sales
    • Loss disallowance
    • Examples
  5. Other transactions
    • Installment sales
    • Involuntary conversions
    • Like kind exchanges
    • Other

Benefits

The panel will cover these and other key issues:

  • When imputed interest is required to be assessed between related parties
  • How is the gain calculated on a subsequent sale of an asset when a loss was disallowed initially under Section 267?
  • When is interest income and expense between related parties recognized by the payor and payee?
  • What relationships constitute associated parties under Section 267(b)?
  • How are like kind exchanges and installment sales affected when between related parties?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify related parties under IRC Section 267(b)
  • Determine when imputed interest must be charged under Section 267
  • Decide how related party status affects a like kind exchange
  • Ascertain when interest income between related parties using different accounting methods is recognized

  • 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 individual income taxation, including itemized deductions, individual income tax credits, net operating loss limitations including carrybacks and carryforwards.

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).