DESCRIPTION
This module provides an in-depth review of basis rules for C corporations, S corporations, and partnerships, highlighting the key differences in how basis is established and adjusted. Participants begin by exploring the mechanics of computing C corporation shareholder basis in connection with property contributions. The course then addresses the computation of S corporation shareholder stock and debt basis, including basis ordering rules and the tax ramifications of distributions in excess of basis. The module concludes with a discussion of partnership outside basis and the effects of partnership liabilities on that basis. Through structured discussion, case studies, and client fact patterns, the course reinforces participants’ understanding and practical application of basis rules.
LEARNING OBJECTIVES
- Describe C corporation shareholder basis considerations, including types of stock, Section 351 transactions, and property contributions.
- Differentiate basis rules for C corporations, S corporations, and partnerships, including the impact of contributions, income, losses, and liabilities.
- Determine shareholder stock basis in an S corporation, including the impact of income, losses, distributions, and debt basis.
- Compute partnership outside basis after considering income allocations, distributions, and changes in partnership liabilities.
- Assess client fact patterns to determine basis limitations, restoration strategies, and related tax reporting implications.
