Pass-Through Entities and Stock Basis Calculations: Challenges for Enrolled Agents

Tackling Complex Issues for S Corporations, LLCs and Partnerships

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

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Conducted on Tuesday, May 13, 2014

Recorded event now available

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Course Materials

This course will improve enrolled agents’ familiarity with issues involved in calculating basis for owners of pass-through entities, including adjustments that need to be made to reflect increases to and reductions of the initial owner’s investment.

Description

Enrolled agents may wrestle with issues over calculating basis in investments in pass-through entities during any number of client representation settings. Annual income, distribution and loans can affect the owner's basis, and making correct increases and decreases can be tricky.

Capital contributions, ordinary income, and investment income and gains all commonly increase basis. Enrolled agents also must decrease basis to reflect Sect. 179 deductions, charitable contributions, non-deductible expenses and distributions.

In navigating the numerous compliance decisions that can arise for an enrolled agent involving basis for investments in pass-through entities, professionals can benefit from a thorough review of issues and peer experiences with this complex topic.

Listen as our panelists explore the rules governing basis calculation for pass-through entities and offer practical experiences of value to an enrolled agent.

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Outline

  1. Basis issues with S corporations
    1. Increases and decreases to basis
    2. Order of basis adjustments
    3. When to calculate basis, and timing rules
    4. Per-share per-day
    5. Cut-off method
    6. Debt basis issues
  2. Basis issues with partnerships
    1. Inside and outside basis
    2. Calculation of basis
    3. Sect. 704(b) vs. tax basis
  3. Partnership and LLC at-risk basis
    1. At-risk basis and tax basis
    2. Debt allocation issues

Benefits

The panel will review these and other key questions:

  • What complexities should enrolled agents anticipate regarding basis for pass-through entities?
  • What increases and decreases should be considered for the basis calculation?
  • Why is the order of calculating increases and decreases important?
  • Why should the enrolled agent be aware of basis increases and decreases?
  • What are the resulting differences if an entity operates as a S corp., LLC or partnership?

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

Faculty

Walter McGrail
Walter McGrail
Senior Manager
Cendrowski Selecky

As one of the firm’s senior tax and legal technicians, Mr. McGrail has provided consulting services to a...  |  Read More

Madhuri Thaker
Madhuri Thaker
Tax Partner
Plante Moran

Ms. Thaker works with high-net-worth families, corporations, partnerships, expatriates, and inpatriates on wealth...  |  Read More

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