Course Description

Calculating partnership basis is one of the most important things that we do as practitioners. However, it is also one of the most confusing. When we use the term basis, we really could be referring to one of three different things! This course will explore the differences between inside basis, outside basis, and 704(b) basis. Through several examples and practice problems, we will show you how to easily distinguish between these terms. We will also explore the tax implications of initial contributions of property to a partnership.

Learning Objectives

  • Calculate Inside Basis, Outside Basis, and 704(b) Basis

  • Recognize the concept of Substantial Economic Effect

  • List the three requirements that need to be present for an allocation to be deemed to have Economic Effect

  • Calculate the reallocation of items of gains and loss under IRC 704(b) when a qualified income offset is present

  • Recognize the tax effects of transferring cash, property, and services to a partnership

  • Recall the tax effects of contributing assets to a partnership that are encumbered by debt

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 basis types, the calculation of basis, and the implications of making contributions to a partnership.

  • 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.