Partnership Basis for Beginners
IRS Program #: X9QQU-E-00821-21-S
Speaker: Jane Ryder, EA, CPA
Understanding and tracking a partner’s tax basis in a partnership is a valuable skill set for both individual tax preparers and business entity tax preparers. Basis is the first of four loss limitations a partner is subject to before deducting a partnership pass-through loss on their individual tax return, if the basis is wrong the partner may miss a valid pass-through loss, overpay taxes on distributions, or the sale of a partnership interest, have a weaker position when negotiating a partnership buy out and possibly be exposed to compliance and audit risk. We’ll discuss the many components of a partner’s basis; allocating profit, losses, and other adjustments, partnership contributions, loans to the partnership, loan guarantees, distributions, partner benefits, sale of a partnership interest, distributions of partnership assets, and more.
Level of presentation: Beginner
- Calculate and track accurate inside and outside partnership basis with an understanding of the components of basis
- Develop valuable tax strategies and tax planning moves to maximize a partner’s tax benefits for utilizing pass through losses and minimizing tax on distributions and sale of a partnership interest
- Learn the latest partnership K-1 basis reporting requirements
- Maintain important worksheets to substantiate basis records, re-construct missing basis records, and support the taxpayer’s compliance and audit defense related to basis
This course qualifies for IRS Continuing Education Hours. NAEA reports IRS CE on a monthly basis. If you have not received your CE Hours in your IRS PTIN Account by the end of the month after receiving the certificate, please contact NAEA at firstname.lastname@example.org.
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