Partnerships & LLCs: Special Allocations and Distributions

Highlights

*  Allocations of income and loss with respect to contributed property under the § 704(c) regulations, using the traditional method, the traditional method with curative allocations, and the remedial allocation method

*  Reverse § 704(c) allocations

*  Allocations of income and loss under the primary economic effect test

*  Allocations under the alternate economic effect test

*  Nonrecourse deductions, qualified income offset, and minimum gain chargeback

*  Allocations of income and loss under the partner’s interest test

*  Testing for substantiality

*  Allocation of recourse, nonrecourse, and qualified nonrecourse debt

*  Treatment of guarantees, assumptions, and indemnification agreements

*  Allocation of nonrecourse deductions and liabilities, including minimum gain, nonrecourse deductions, and minimum gain chargebacks

*  Understanding what is necessary in order to create a deficit in the book or tax capital account of a member of an LLC

*  At-risk rules as applied to LLCs, including deficit restoration obligations

*  Review of an LLC operating agreement.

*  Current and liquidating distributions, including § 754 election

*  Disproportionate distributions under § 751(b), including accounting for a partner’s interest in unrealized receivables and substantially appreciated inventory

*  Distributions to retiring and deceased partners, including payments for unstated goodwill, the different options available for reporting gains and losses, and the effect of a § 754 election

*  Application of the new 3.8% Medicare tax to partnership distributions. M Distributions of marketable stock and securities

*  Reporting distributions on Form 1065

*  IRD, the types of IRD items, and the effect of a § 754 election

*  Self-employment problems that result from distributions

*  Cross-purchase agreements and redemption agreements, with and without a § 754 election.

Objectives

This course will provide guidance and a thorough understanding of the planning opportunities and pitfalls of special allocations, as well as LLC allocations and the sharing of partnership debt  It is also designed to update the participant on the taxation of distributions of cash, prop­erty, marketable stock, and securities.