Reporting UBTI and UBIT in Partnerships and S Corporations: Mastering K-1 Disclosures for Exempt Org Partners

Key Box 20V Reporting, Footnotes and Separate Disclosures, and UDFI Exemptions

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


Conducted on Thursday, September 29, 2016

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide a comprehensive and practical guide into the rules governing Unrelated Business Income Tax (UBIT) on Unrelated Business Taxable Income (UBTI) as applied to partnerships and S corporations. The panel will discuss the reporting requirements imposed on tax advisers serving pass-through entities which have exempt organizations as partners or shareholders. The webinar will cover the specific reporting challenges facing tiered partnerships, and will offer usable guidance on completing required disclosures to accompany the partnership Schedule K-1.

Description

An often overlooked challenge for advisers of pass-through entities in preparing partnership and S corporation tax returns is the presence of exempt organizations as partners or shareholders. Partnerships are required to furnish their partners the information necessary to compute their distributive share of partnership income and deductions from any unrelated trade or business. Box 20, Code V on the Schedule K-1 should indicate the amount of unrelated business income.

However, the UBTI information is often buried in footnotes and the impact of UBTI is not accurately addressed at all. For partnerships with exempt org partners, accurate reporting of UBTI is critical to the exempt partner’s tax return.

Tax advisers preparing partnership tax returns should consider preparing separate disclosures detailing UBTI that would be reportable by exempt organization partners. If the partnership holds debt-financed property as assets, this becomes especially critical because the exempt org partner is subject to reporting and payment obligations. The Section 514(c)(9) qualified-organization rules may offer relief from UDFI obligations, so the partnership K-1 must clearly identify UDFI in its K-1 disclosures.

Listen as our panel of experienced advisers provides a comprehensive and practical guide to K-1 reporting of UBTI and UDFI for exempt organization partners.

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Outline

  1. UBTI Background, Overview and Consequences
  2. Partnership and S Corporation Fundamentals and Reporting
  3. UBTI Exceptions
  4. UDFI Rules
  5. Planning Considerations

Benefits

The panel will discuss these and other important issues:

  • Understanding situations in which UBTI is a risk and how to inquire further with the exempt organization
  • How to identify risks to the exempt organization’s tax exemption
  • Fundamentals of calculating UDFI and exempt organization tax liability
  • How to structure exempt organization investments to minimize exposure to UBTI.

Faculty

Funk, William
William M. Funk

Atty
Law Office of William M. Funk

Mr. Funk focuses his practice on tax law, with extensive experience in tax planning and dispute work. He...  |  Read More

Mills, Elizabeth
Elizabeth M. Mills

Senior Counsel
Proskauer Rose

Ms. Mills focuses her practice on both health care organizations and tax exemption issues for not-for-profit...  |  Read More

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