The Mechanics Toolbox Series is designed to identify and describe the mechanical intricacies and challenges of taxation. This installment of the Series is focused on Partnerships. Partnerships have great flexibility in how they operate; however, when decision makers are evaluating the impact of the flexibility that partnerships have, the tax implications of that flexibility are often over simplified making it difficult for decision makers to fully understand the impact to the partnership and the partners. This installment in the Series is intended to take participants on a journey that recognizes the complexities that key decisions makers are faced with regarding partnerships. This installment in this series starts with simple examples, but then moves to complex scenarios so that participants get a complete understanding of progressive complexity in connection with how a decision might impact the partnership and the partners. In this session, participants will be equipped to evaluate decisions surrounding partnership capital account maintenance and Section 704(c) (built-in Gain/Losses). This session will address the following topics: What is partnership capital account maintenance and why is it important? What is Forward and Reverse section 704(c) and when will a partnership have these? What is a revaluation, and when may a partnership want to revalue? What allocation methods are available for section 704(c) property, and what challenges might a partnership face with each of the methods? What is the difference between a Target (distribution-based agreement) and Safe harbor (allocation-based agreement) approaches?
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- Identify what Partnership Capital Account Maintenance is and why it is important
- Describe the operation of Forward 704(c), Reverse 704(c) and the various 704(c) methods using simple and complex scenarios
- Describe the intricacies and challenges of Target (distribution-based agreements) versus Safe Harbor (allocation-based agreements) approaches
Please note: CPE credits are not awarded for webcast replay.
Recommended Field of Study: Taxes
Program Level: Overview
Delivery Method: Group-Internet
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