DESCRIPTION
This module explores the partnership loss limitation rules under IRC §§704(d), 465, and 469, focusing on how each rule restricts the deductibility of losses. Through a combination of lecture and practical exercises, participants compute allowable losses and determine the impact of basis, at-risk amounts, and passive activity classifications. Emphasis is placed on understanding the inputs to each limitation and evaluating how changes in taxpayer facts affect loss utilization across tax years.
LEARNING OBJECTIVES
- Differentiate between the partnership loss limitation rules under § 704(d), § 465, and § 469, including the order in which each limitation applies.
- Apply the § 704(d) and § 465 rules to determine deductible losses.
- Analyze passive activity classifications under §469 to determine whether partnership losses are currently deductible or suspended.
- Evaluate how changes in basis, at-risk amounts, or activity status affect a taxpayer’s ability to utilize partnership losses across multiple tax years.
