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


Tuesday, November 30, 2021

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

Early Registration Discount Deadline, Friday, November 5, 2021

or call 1-800-926-7926

This course 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 revalue (restate) the partners' capital accounts to FMV, commonly called a "book-up" or “book-down” 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.

READ MORE

Outline

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

Benefits

The panel will review these and other key issues:

  • Understand the IRC 704(b) capital account maintenance rules
  • Ascertain the impact of contributions of built-in gain or built-in loss property
  • Identify the mechanics of book-ups and book-downs
  • Recognize the benefits and detriments of revaluations
  • Determine when unrecognized Section 704(c) gains and losses must be reported on Schedule K-1

Faculty

Brock, Noel
Professor Noel P. Brock

Assistant Professor
Eastern Michigan University

Professor Noel P. Brock is an associate professor at Eastern Michigan University where he teaches and researches in all...  |  Read More

Carrasco, Jose
Jose Carrasco

Managing Director
Grant Thornton

Mr. Carrasco is a Managing Director in the partnership tax group of Grant Thornton’s Washington National Tax...  |  Read More

Sinnett, C. Todd
C. Todd Sinnett

Partner, Partnership Taxation
Grant Thornton

Mr. Sinnett is a partner in Grant Thornton’s partnership taxation business. He currently leads the firm’s...  |  Read More

Attend on November 30

Early Discount (through 11/05/21)

CPE credit processing is available for an additional fee of $39.
CPE processing must be ordered prior to the event. See NASBA details.

Cannot Attend November 30?

Early Discount (through 11/05/21)

CPE credit is not available on downloads.

Download