[WEB] Death or Retirement of a Partner

Description

LINK AND INSTRUCTIONS TO COME FROM AES TAX ONE DAY PRIOR TO SESSION

The participant will learn the rules that apply when a partner/member dies or retires from a partnership/LLC.

Objectives

After completing this course the participant will be able to:

• Determine the tax effect if a member abandons or forfeits its interest in the LLC, including the character of the gain or loss and the effect on the remaining members.
• Explain why, when a partner “retires” from a large public accounting or national law firm, the partnership generally is required to redeem the retiring partner’s interest.
• Differentiate between a cross purchase agreement and a redemption agreement.
• Explain the difference between a tax partnership redeeming a member's interest for a guaranteed amount and redeeming a member's interest for a distributive share of the income under §736(a).
• Explain the term “capital is not a material income producing factor.”
• Determine when payments (received by a retiring member) are considered as selfemployment income.
• Identify the tax effect of the death of a partner, determine if there is income in respect of a decedent, and calculate the basis adjustment if there is a §754 election.
• Determine the tax effect of payments made to a member of a two-person LLC (cross purchase or redemption).
• Explain the interaction of the disproportionate distribution rules of §751(b) and §736 payments.
• Determine when a two-member LLC terminates and the effect of Rev. Rul. 99-6.
• Describe the tax effect on the death of a partner and the three possible ways that the interest may be transferred.