Don Farmer's Top 10 Partnership Issues & How to Avoid Them
2.00 Credits
Member Price $89
Non-Member Price $109
Overview
Partnership taxation remains one of the most complex and high-risk areas of federal tax compliance. From basis calculations and allocation rules to disguised sales, debt allocations, and partnership audit exposure, even experienced CPAs can encounter technical pitfalls that create significant financial and professional risk.
This two-hour program examines the top 10 partnership tax issues most frequently encountered in practice. Designed specifically for CPAs advising partnerships and partners, the course provides practical guidance to identify, analyze, and avoid common compliance errors under Subchapter K. Through real-world examples and application of current tax law, participants will strengthen their technical proficiency and improve the quality of client advisory services.
Highlights
- Overview of Subchapter K and common partnership risk areas
- Partner capital accounts: tax basis vs. §704(b) capital vs. book basis
- Outside basis vs. inside basis calculations
- Allocation rules and substantial economic effect under §704(b)
- Partnership liabilities and debt allocation under §752
- Disguised sales and related-party transactions under §707
- Partnership distributions (current and liquidating) and gain recognition rules
- Sale or exchange of partnership interests and §751 hot assets
- §754 elections and basis adjustments
- Overview of the centralized partnership audit regime (BBA)
- Best practices for documentation and compliance risk mitigation
Prerequisites
None
Designed For
CPAs and tax professionals involved in the world of tax.
Objectives
- Identify common technical errors in partnership taxation and explain their compliance implications.
- Differentiate between outside basis, inside basis, and §704(b) capital accounts.
- Analyze the tax impact of partnership liabilities under §752.
- Determine when a transaction may be treated as a disguised sale under §707.
- Apply rules governing partnership distributions and recognize when gain must be reported.
- Evaluate the tax consequences of selling a partnership interest, including §751 hot asset treatment.
- Explain the purpose and impact of a §754 election.
- Recognize audit and compliance risk areas under current partnership tax rules.
Preparation
None
Leader(s):
Leader Bios
Nicholas Preusch
Nicholas Preusch, CPA, JD, LLM, is a tax manager with PBMares, LLP, in Fredericksburg, VA, where he works with high wealth individuals and mid- to large-size companies focusing on tax controversy and complex tax issues. In addition, Nicholas is an adjunct professor at the University of Mary Washington. Nicholas has been published in the AICPA’s Journal of Accountancy and Tax Adviser, and in CCH’s Journal of Tax Practice and Procedure. He co-authored the textbook Tax Preparer Penalties and Circular 230 Enforcement, published by Thomson Reuters. Nicholas was named one of the VSCPA’s Top 5 Under 35 in 2017. Prior to joining private practice, Nicholas started his career as an IRS Revenue Agent. He later joined the IRS Office of Professional Responsibility as an enforcement attorney. While at OPR, he was the lead attorney on several milestone cases such as Gass and Pezzo. Nicholas is a graduate of Carthage College, degree in Accounting and Business; he has also earned a Master of Science in Accounting from the University of Connecticut, his JD from Case Western Reserve University, and his LLM in Taxation from Georgetown University.
Non-Member Price $109
Member Price $89