DESCRIPTION
This module explores the mechanics of IRC §704(c) allocations using the traditional method, the traditional method with curative allocations, and the remedial method. Participants work through comprehensive examples and detailed calculations covering both depreciable and non-depreciable property that have built-in gains and built-in losses. The course highlights the tax and economic implications of each method and provides practical guidance on method selection. An optional section addresses §704(c) revaluations and their effect on partner allocations.
LEARNING OBJECTIVES
- Differentiate between the traditional method, the traditional method with curative allocations, and the remedial method under IRC §704(c).
- Calculate §704(c) allocations using the traditional, curative, and remedial methods.
- Analyze the economic and tax effects of method selection on contributing and non-contributing partners.
- Calculate §704(c) allocations attributable to built-in losses for both depreciable and non-depreciable property.
- Optional – Discuss the implications of a partnership revaluation.
