Section 704(c) Capital Account Book-Ups: Revaluation of Partnership Assets

Triggering Events for Revaluations, Effects of Revaluations on Allocations of Tax Items

Note: CLE credit is not offered on this program

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


Wednesday, December 2, 2020

1:00pm-2:50pm EST, 10:00am-11:50am PST

Early Registration Discount Deadline, Friday, November 6, 2020

or call 1-800-926-7926

This webinar will provide tax advisers with a practical guide to the complexities of capital account revaluations or "book-ups" under Section 704. The panel will detail the circumstances and events under which a partnership may revalue its property to FMV to adjust the capital accounts of its members.

Description

Maintaining partners' capital accounts often presents significant challenges for even the most experienced practitioners. It can be particularly challenging to understand the capital account maintenance rules and Section 704(c) effects in situations where one or more partners have contributed built-in gain or built-in loss property.

Under certain circumstances, a partnership may be entitled to restate the partners' capital accounts to FMV, commonly called a "book-up" of the partners' capital accounts. A book-up can be beneficial to maintain the intended economics of the partnership. But it can also result in complex Section 704(c) consequences. The current requirement to report unrecognized 704(c) gains on Schedule K-1 has made understanding these transactions critical for tax professionals.

Listen as our panel of experienced tax practitioners provides a practical guide to Section 704 capital account book-ups.

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Outline

  1. Overview of Section 704(b) capital account maintenance rules
  2. "Forward" Section 704(c): contributions of built-in gain or built-in loss property
  3. Book-ups: when are they permitted, how are they done, and what are the consequences?
  4. "Reverse" Section 704(c): tax allocations following a book-up

Benefits

The panel will review these and other key issues:

  • Triggering events that will permit a revaluation of partnership assets
  • Benefits and detriments of revaluations
  • Required reporting of unrecognized 704(c) gains and losses on Schedule K-1
  • Mechanics of book-ups
  • How a book-up might affect subsequent book and tax allocations

Faculty

Langdon, Nancy
Nancy L. Langdon

Managing Director, WNTS M&A Tax
PwC

Ms. Langdon has 16 years of experience working with clients on a broad range of tax issues and specializes in complex...  |  Read More

Stoner, Megan
Megan Stoner

Senior Manager, WNTS M&A Tax
PwC

Ms. Stoner specializes in partnership taxation. She has significant experience assisting clients with complex...  |  Read More

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