DESCRIPTION
This module provides an overview of the tax and legal framework governing Limited Liability Companies (LLCs) and partnerships, with a focus on entity classification and pass-through taxation. It explains key concepts such as guaranteed payments, partner roles, and check-the-box elections, along with the application of self-employment tax rules to LLC members. The course also explores partnership liabilities, including the allocation of recourse debt and its impact on partner basis and risk. Group discussions and interactive activities are incorporated to reinforce key concepts and support practical application.
LEARNING OBJECTIVES
- Identify the fundamental taw laws governing Limited Liability Companies (LLCs) and Partnerships.
- Define guaranteed payments and evaluate when their use is appropriate within partnerships and LLCs.
- Determine the appropriate tax classification options for an LLC under the check-the-box regulations.
- Differentiate between general partners, limited partners, managing members, and non-managing members.
- Analyze the guidance on self-employment tax reporting and its application to LLC members.
- Categorize partnership liabilities.
- Examine how recourse debt is allocated among partners under the applicable framework.
