DESCRIPTION
This module explores the relationship between a partner’s tax basis and the tax consequences of losses, distributions, and disposition transactions. Participants examine the distinctions between inside and outside basis as well as tax basis and at-risk basis. The course analyzes the transactions and events that increase or decrease basis and evaluates how partnership and LLC liabilities affect a partner’s ability to deduct losses. Exercises throughout the module, along with a comprehensive case study, reinforce the practical application of these concepts.
LEARNING OBJECTIVES
- Describe the relationship between a partner’s tax basis and the tax consequences of losses, distributions, and disposition transactions.
- Differentiate between inside basis and outside basis.
- Differentiate between tax basis and at-risk basis.
- Analyze the increases and decreases to tax basis and at-risk basis.
- Evaluate how partnership and LLC liabilities impact a partner’s tax basis and at-risk basis for purposes of deducting partnership losses.
