Course Description

How debt is allocated to the partners in a partnership is important. It dictates how much money may be taken tax-free as a distribution, the losses that flow down to the partners, and the gain or loss on the sale of a partnership interest. However, the allocation of debt can differ depending on the type of debt that it is and the type of partner we are talking about. Not to mention that 704(c) can complicate things. And what in the world is a constructive liquidation scenario? In this session of Understanding Partnership Taxation, we will tackle the concept of debt allocations – how you do it, what it means, and why you do it!

Learning Objectives

  • State how debt allocations affect the calculation of a partner’s basis in the partnership

  • Recognize how recourse and nonrecourse debt are allocated to partners

  • Identify the tax effects of 704(c) on contributed property

Additional Required Materials

  • Level: Intermediate

  • Field of Study: Taxes (NASBA); Characteristics and Income Taxation of Business Entities (CFP); Federal Taxation (IRS)

  • Who Should Attend: Tax practitioners who are looking to improve their knowledge of debt allocations and how they affect a partner’s tax basis

  • Required Knowledge: Working knowledge of fundamental partnership tax concepts

  • Advanced Prep: None

Instructor

CPA, CPCU, MST, MBA David Peters

David Peters is the Founder and Owner of Peters Tax Preparation & Consulting in Richmond, VA. He has over fourteen years of experience in financial services, including 3 years in the hedge fund industry and six years in the insurance industry. David was the first-ever Chief Financial Officer at Compare.com - a position he held for over three years. He is a national CPE Instructor/Discussion Leader for the AICPA, Surgent, and Kaplan. He regularly teaches courses in accounting, finance, insurance, and ethics throughout the United States. He holds four Masters degrees and contributes regularly to various CPA publications, including NCACPA’s Interim Report, SCACPA’s CPA Report, and VSCPA’s Disclosures. He was also a co-author of the 2018 Virginia CPA Ethics course – a required course for all CPA’s licensed in the Commonwealth of Virginia.