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Tax Strategies for Partnerships Part 1: Formation, Purchase, and Sales of Partnership Interests, by Wolters Kluwer

Tax Strategies for Partnerships Part 1: Formation, Purchase, and Sales of Partnership Interests is brought to you by Wolters Kluwer

Join expert Greg White, CPA, as he discuss tax strategies for minimizing gain when forming a partnership. He will also cover considerations in drafting a “mandatory tax distributions” provision so that your clients don’t end up with “phantom income.” You’ll also learn how to maximize the tax effects of purchasing a partnership interest and selling a partnership interest.

Publication Date: May 2022

Topics Covered

  • What business arrangements constitute a partnership for federal tax purposes
    • And why is it crucial to understand this
  • Partnership basis rules
    • Using the “liability netting” rules to avoid gain on the formation of a new partnership
  • Reduce the chances that your client will end up with “phantom income”
    • Considerations in structuring a “mandatory tax distributions” provision
  • Picking the best §704(c) allocation method for your client
  • Computing bonus depreciation on partnership step-ups under §743
  • Qualifying for a §199A deduction when your client sells their partnership interest

Learning Objectives

  • Recognize how to protect your clients from phantom income based upon a mandatory tax distributions provision
  • Identify which income qualifies for the §199A QBID when selling a partnership interest
  • Differentiate court cases and how they apply
  • Identify the late filing penalty per partner per month
  • Describe the percentage of partnerships that are in real estate
  • Recognize which type of income arises when the taxpayer has income tax but little to no cash to pay the tax
  • Identify the approximate cost referenced for a “questionnaire” cost segregation study

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