Partnership & S Corporations: How to Calculate Basis
Description:
A detailed analysis of the calculations related to determining a partner's tax basis for a partnership interest and shareholder interest in an S corporation. How to use the Forms 1065 and 1120S, Schedule K-1 information for basis determination will be demonstrated using illustrative examples with filled in forms to show how the process works along with its many potential pitfalls.
Highlights:
Clarify the importance of partnership capital accounts and partnerships debt on partner's tax basis.
Impact of contributed property.
Explain the use of both "inside" and "outside" basis determination.
Explain the importance of shareholder loans to the entity.
Discuss how basis is impacted by distributions of corporation property and the sale/or liquidation of the S corporation interest.
Comprehensive examples illustrate the mechanics of the basis determination process.
Discusses how S corporation losses impact Form 1040 Schedule E reporting
How to get from the Schedule K-1 information to the basis calculations.
Objectives:
Identify the tax issues related to reporting partner and shareholder owner's basis for shares and loans
Identify potential pitfalls and provide planning topics.
Prerequisites:
None