Partnership Tax Basis and Distribution Challenges for Counsel and Advisors

Navigating Complex Distribution Rules and Impact of Sections 731-737, 751(b) and 755

Recording of a 110-minute premium CLE/CPE webinar with Q&A

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Conducted on Wednesday, August 14, 2013

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Course Materials

This teleconference will provide tax practitioners with an in-depth review of the rules for partnership basis adjustments and distributions under Code sections 731 through 737, 751(b) and 755. The panel will also outline how to avoid taxable pitfalls in applying the rules to partnership transactions.

Description

Generally, the Internal Revenue Code regs aim for partnership distributions to be treated as non-taxable events. However, exceptions to those rules can quickly turn distributions taxable. And, that is where tax practitioners are often trapped by the terms of sections 731 through 737, 751(b) and 755.

Section 751(b) can be deceptively complicated, as examples in the regulations are oversimplified relative to real life scenarios. However, a practitioner's understanding is vital to providing the foundation for tax transfers of partnership interests. Section 737 also poses various challenges for tax pros.

Section 731 is key to understanding whether a disguised sale overrides partnership distribution rules. An incorrect assumption leads to poor decision making on the tax status of a distribution. Tax practitioners working with partnership basis and distributions must effectively navigate these Code sections.

Listen as our panel of experienced tax practitioners explains the material terms of sections 731 through 737, 751(b) and 755, and explores common taxpayer scenarios involving partnership distributions and basis adjustments.

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Outline

  1. Types of distributions resulting from a partnership
  2. Section 731 on gain or loss recognition
  3. Section 732 on partner's basis of property received
  4. Section 733 on partner's remaining basis
  5. Section 734 on adjustment to basis
  6. Section 751(b) property
  7. Section 755 allocation of basis

Benefits

The panel will review these and other key questions:

  • How do you determine when basis of property received exceeds the partnership interest's outside basis?
  • What are the circumstances under which utilizing section 732 makes the most sense?
  • What potential pitfalls exist in section 751(b) and what are best practices for handling these pitfalls?
  • What practical issues arise with special basis adjustments under section 755 caused by installment sales and modified depreciation on stepped-up assets?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Lencz, Norman
Norman Lencz
Partner
Venable

Mr. Lencz focuses his practice on a broad range of international, federal, state and local tax matters. He advises...  |  Read More

Davidson, Christopher S.
Christopher S. Davidson
Atty
Venable

Mr. Davidson's a Member of the firm’s Tax and Wealth Planning Group. He advises clients on a wide range...  |  Read More

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