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Form 1065 Tax Basis Capital Methods

Transactional Approach, Handling Prior Year Noncompliance, Tracking Outside and Debt Basis

Note: CLE credit is not offered on this program

A live 110-minute CPE webinar with interactive Q&A

This program is included with the Strafford CPE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Tuesday, April 23, 2024 (in 10 days)

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

or call 1-800-926-7926

This course will instruct practitioners on the latest tax basis capital reporting requirements. Our panel of experts will discuss the transactional approach for tax basis capital and best practices for handling partnership returns that may not have been compliant in the past. They will also provide examples and tips for tax professionals to calculate and comply with the latest IRS capital reporting requirements.

Description

The instructions to Form 1065 make it clear that partners' capital accounts should be reported using the tax basis method. Further, the instructions state you should "Figure each partner's capital account for the partnership's tax year using the transactional approach." Not all partnerships maintain their books and records on a tax basis, and the transactional approach is not clearly defined.

Partnerships with less than $250,000 in sales and $1 million in assets (those able to omit completion of Schedule L, M-1, and M-2) are not required to report capital account changes in Item L of the Schedule K-1. All other partnerships must report and maintain partners' tax basis capital accounts on partnership returns.

Tax practitioners preparing partnership returns need to understand the current requirement to report tax basis capital for all partners to comply with the latest guidelines, avoid penalties, and properly report tax basis gains and losses.

Listen as our panel of partnership veterans explains what is known to date about tax basis capital account reporting, including the transactional approach in the current Form 1065 instructions, as well as steps practitioners can take to streamline compliance with these latest guidelines.

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Outline

  1. Tax basis capital reporting
  2. Transactional approach
  3. Section 754 transactions
  4. Transfers of interests, sales, and other issues
  5. Handling prior-year noncompliant returns
  6. Examples

Benefits

The panel will cover these and other critical issues:

  • Tracking capital for tax return reporting versus total basis for partners, including Section 743(b) adjustments and debt
  • Using the transactional approach to calculate annual partnership capital account changes
  • Practical solutions for handling partnership returns that were noncompliant in the past
  • Current guidance for reporting capital balances with Form 1065 instruction guidelines

Faculty

Clayman, Jeffrey
Jeffrey Clayman, CPA, JD, LLM

Tax Senior Director
Alvarez & Marsal

Mr. Clayman has over 18 years of public accounting experience with a focus on for-profit businesses in many different...  |  Read More

Lovett, Brian
Brian T. Lovett, CPA, JD

Partner
Withum Smith+Brown

Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses,...  |  Read More

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