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State Pass-Through Entity Taxation Regimes: Case Studies on Various Traps That PTEs and Their Owners Can Fall Into

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

This program is included with the Strafford CPE Pass. Click for more information.
This program is included with the Strafford CPE+ Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, August 1, 2024

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

or call 1-800-926-7926

This course will discuss states' pass-through entity (PTE) taxation regimes and when and how to elect PTE taxation in applicable states, as well as analyze the ultimate taxation of owners to mitigate taxes paid.

Description

This course will discuss states' pass-through entity (PTE) taxation regimes and the various traps that PTEs and their owners can fall into, and how to avoid them. Almost all of the states have enacted PTE taxes in response to the 2017 Tax Act, which added a $10,000 cap on deductible state and local taxes paid by individuals. The enactment of these PTE taxes has created significant complexity because of the subtle differences in the mechanics inherent in the different PTE taxes. These subtle differences can cause a PTE and/or its owners to fall into the trap of paying more in Federal income and/or state taxes if state PTE elections are made.

Richard W. Spengler, National Technical Leader for State and Local Tax at BDO USA and Kimberly Capizzi, Managing Director in State and Local Tax at BDO USA will cover PTE taxation methods, examples of common PTE taxation scenarios, and key caveats to consider before electing PTE treatment in states where payment of the tax is elective. Listen as our panel of state and local tax experts use a case study approach to address the issues that are commonly encountered with state PTE taxes.

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Outline

  1. Background
  2. Mandatory PTE taxation
  3. Elective PTE taxation
  4. Specific state taxation regimes
  5. Analyzing the impact of PTE taxation on owners
  6. Best practices

Benefits

The panel will cover these and other critical issues:

  • When does the PTE and/or the owners have to include a state tax refund in Federal gross income?
  • When should the PTE deduct the state PTE taxes for Federal income tax purposes?
  • Can an owner of a PTE get allocated the ‘incorrect’ amount of the PTE tax expense?
  • What happens to the owner’s tax benefit when the owner of a PTE has suspended losses?
  • Should a PTE with trust owners make state PTE elections?
  • Can an interest expense limitation under IRC Section 163(j) cause more state tax to be paid if state PTE elections are made?
  • When a PTE sells its business are there circumstances where state PTE elections should not be made?

Faculty

Capizzi, Kimberly
Kimberly Capizzi, CPA

Managing Director, State & Local Tax
BDO USA

Ms. Capizzi works in the firm’s State and Local Tax Practice with more than 12 years of experience in public...  |  Read More

Spengler, Richard
Richard W. Spengler, CPA

National Technical Leader - State & Local Tax
BDO USA

Mr. Spengler's main area of focus is state income and franchise taxes with significant experience in the design and...  |  Read More

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