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
