2024 Partnerships and S Corporations: How to Calculate Basis

Overview

The IRS has recently increased the pressure on how to calculate and report partner and shareholder basis. Changes in the forms reflect these developments. This program provides a detailed analysis of the calculations related to determining tax basis for a partnership interest and S corporation shareholder shares and loans. How to use the Form 1065, Schedule K-1 and Form 1120S, Schedule K-1 information for basis determination. Illustrated examples with filled in forms will demonstrate how the processes works and their many potential pitfalls.

**Please Note: If you need credit reported to the IRS for this IRS approved program, please download the IRS CE request form on the Course Materials Tab and submit to kori.herrera@acpen.com.

Highlights

Calculation of basis when the entity is formed, including the impact of contributed property
How to calculate partnership tax basis capital accounts
Explains the use of both "inside" and "outside” basis determination
Clarifies the how partnerships and S corporations debt impacts tax basis
Discusses how distributions affect basis
Explains how basis is impacted by sale and/or liquidation of the partnership or S-corporation interest
Discusses how S corporation losses impact Form 1040 Schedule E reporting

Prerequisites

Basic working knowledge of partnership and S corporation taxation

Designed For

CPAs working in public accounting firms and/or working for partnerships or S corporation

Objectives

Identify the tax issues related to LLC members/partners basis from formation through operations and concluding with sale and/or liquidation
Identify the tax issues related to S corporation owner's basis for shares and loans from formation through operations and concluding with sale and/or liquidation
Understand potential pitfalls and planning strategies