DESCRIPTION
One of the most overlooked areas on a K-1 is the allocation of partnership debt. Many practitioners understand the basic concepts surrounding §752 liabilities and the impact that it can have on the partners; however, there are many important considerations related to debt that even the most seasoned tax professionals do not fully understand. This module will help guide individuals through the intricacies of partnership debt, the allocation of debt, the effects of guarantees, and other important considerations.
LEARNING OBJECTIVES
- Define what an IRC §752 liability is.
- Analyze the difference between recourse and nonrecourse debt.
- Discuss different factors of economic risk.
- Calculate the allocation of recourse debt under Reg §1.752-2(b)(1).
- Apply the allocation of nonrecourse debt under Reg §1.752-3(a)(3).
