Delve into two important topics of partnership/LLC taxation. First, coverthe tax consequences of the redemption of a partner’s interest in a partnership, whether by virtue of the retirement or death of the partner. Second, consider the consequences of the Section 754 election, whether at the time of the redemption of a partner, the sale or exchange of a partnership interest, or a distribution from the partnership to a partner. The competing concerns between new and continuing partners will be emphasized.
Recognize how to make a timely section 754 election.
Determine how to compute 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.
Understand when a section 754 election can be revoked
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 IRD issues for the heirs of a deceased partner
Sections 754 elections and purchases or inheritances (section 743)
Section 754 elections and distributions (section 734)
Section 755 rules for the allocation of basis adjustments
Liquidating distributions to partners
Treatment of retired partners or successors of a deceased partner
Special treatment relating to the redemption of a retired or deceased service partner
CPAs or attorneys
General knowledge in partnership taxation.