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Basis Calculations for Partners & LLC Members

4.4 (19)

J. Patrick Garverick, CFP, CPA

THE GARVS LLC

Friday, December 13, 2019 | 11:00 AM EDT

  • CPA
  • EA

4 Credits

$60

Subject Area

Taxes

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Course Description

Limited Liability Companies (LLCs) are complex entities for tax purposes. Generally, for LLCs choosing to be taxed as a partnership, the taxation of independent members depends on the profits or losses of the entity, and the basis of the LLC Member. Basis in the world of pass-through taxation determines the availability of losses, the taxability of distributions, and an owner's ultimate gain (or loss) on disposition.  

MAJOR HIGHLIGHTS

  • Line-by-line analysis of the Schedule K-1s to determine how the items affect a partner/member’s outside basis and where the items get reported on Federal individual income tax return
  • The three loss and deduction limitations on the owner’s individual income tax return (i.e. basis, at-risk and other Form 1040 limitations)
  • How cash or non-cash distributions affect the basis calculations and whether or not they are taxable to the owners
  • How recourse and non-recourse debt affect a partner or member’s basis calculations and amount at-risk
  • The restrictive rules on shareholder debt highlighting the regulations affecting open account debt. 
  • The ordering rules for making multiple basis adjustments
  • The treatment of recourse and non recourse liabilities as components of basis

This webinar by J. Patrick Garverick (CFP, CPA) is particularly important for any tax practitioner who deals at even a basic level with partnership distributions of cash and property and/or the sale of a partnership interest. The concept of basis is fundamental to an understanding of almost all aspects of partnership taxation. 

Learning Objectives

  • List the 3 main reasons for calculating a partner/member’s basis in a partnership/LLC.
  • Calculate the basis for partners and members of a LLC
  • Calculate losses allowed from at-risk activities
  • Review the Form 1065 Schedule K-1 to determine how the line items affect basis calculations and get reported on the individual owner’s Form 1040
  • To determine any gain or loss on the sale of their partnership interest
  • To determine if any distributions from the partnership are taxable
  • To determine if the partner may claim any losses or deductions allocated to them on their Form 1065 Schedule K-1

Who Should Attend?

  • CPA - Large Firm
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • CPA in Business
  • Enrolled Agent
  • Entrepreneurial CPA
  • Tax Firm
  • Tax Practitioners
  • Tax Pros
  • Young CPA

Testimonial

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    [no_of_record] => 19
    [average] => 4.4211
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4.4

(19)
63%
21%
11%
5%
0%

DJ

The material was as was expected but the presenter was great. Great presentation style and great examples and case studies to solve.

JLS

The presentation of the instructor was very effective. I like the recap of the basis calculations. It was very helpful. Many thanks!

MM

Outstanding knowledge gained on Schedule K1 to determine where the items get reported on Federal individual income tax return.

LB

Pattrick is an engaging presenter and keeps the content moving along and shared case studies to solve, I look forward to his next presentation.

KS

Great overview of cash or non-cash distributions affect the basis calculations

BH

Very informative - very dense content. Appreciate accurate information and information resources that I can look up to.