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Calculating partnership basis is one of the most important things that we do as practitioners. However, it is also one of the most confusing. When we use the term basis, we really could be referring to one of three different things! This course will explore the differences between inside basis, outside basis, and 704(b) basis. Through several examples and practice problems, we will show you how to easily distinguish between these terms. We will also explore the tax implications of initial contributions of property to a partnership.
• Calculate Inside Basis, Outside Basis, and 704(b) Basis
• Recognize the concept of Substantial Economic Effect
• List the three requirements that need to be present for an
allocation to be deemed to have Economic Effect
• Calculate the reallocation of items of gains and loss under IRC
704(b) when a qualified income offset is present
• Recognize the tax effects of transferring cash, property, and
services to a partnership
• Recall the tax effects of contributing assets to a partnership that
are encumbered by debt
• Three Different Types of Basis
• Contributions of Property – In General
• IRC 704(b) Capital Accounts & Special Allocations
• Contributions of Property & Debt
• Contributions of Services
• IRS Notice 2020-43
• Review Questions
• Key Takeaways
Tax practitioners who are looking to improve their knowledge of distributions and how they affect a partner’s tax basis
Working knowledge of fundamental
partnership tax concepts
None
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