Section 754 Elections/Redemption of a Partner
This course focuses on two partnership subjects: (1) Section 754 elections and the impact on purchases, inheritances and partnership distributions (sections 743 and 734); and (2) redemptions of a partner including those involving a partner's retirement and a partner's death (sections 731, 732, 742, and 736).
Case studies are used to illuminate the issues. Competing concerns of the partners are emphasized: e.g., conflicts between a buying partner or beneficiary and the continuing partners; and conflicts between a redeemed partner and the continuing partners. Form 1065 preparer reporting obligations, partner capital account impact, and pertinent sample language in partnership agreements will also be discussed.
Note: Course materials include an e-book and PowerPoint slides that reinforce concepts and will be available to attendees.
- Sections 754 elections and purchases or inheritances (section 743)
- Section 754 elections and distributions (section 734)
- Section 755 allocation rules
- Liquidating distributions to partners (AKA: redemptions)
- Treatment of retired partners or successors of a deceased partner
- Special treatment relating to a retired or deceased service partner
- Recognize how to make a timely section 754 election.
- Determine how to compute and report the section 743 or 734 adjustments.
- Determine how to allocate the basis adjustments among partnership assets per section 755.
- Identify the circumstances in which the 754 election is deemed made.
- Recognize the benefits and downsides of the election on the partners.
- Identify the conflicts between the partners that result from the election.
- Determine strategies for making a late section 754 election beyond merely a PLR request.
- Distinguish a current distribution from a liquidating distribution.
- Recognize the unique tax considerations related to the retirement or death of a partner.
- Recognize the special rules involving the retirement or death of a service partner.
- Identify the unique IRD issues involving the buy-out of a deceased partner’s successor.
- Recognize the importance of partnership agreement language with respect to the above issues.
CPAs or attorneys.
Applicable if you are a HSCPA member in good standing.
Applicable if you are not a HSCPA member.