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Understanding Partnership Taxation: Debt Allocations (PTA2)

  • Format Self-Study Webcasts
  • Credits 2.00
  • Level Intermediate
  • Field of Study Taxes (2)

Overview

How debt is allocated to the partners in a partnership is important. It dictates how much money may be taken tax-free as a distribution, the losses that flow down to the partners, and the gain or loss on the sale of a partnership interest. However, the allocation of debt can differ depending on the type of debt it is and the type of partner we are talking about. Furthermore, 704(c) can complicate things. And what in the world is a constructive liquidation scenario? In this course, we will tackle the concept of debt allocations – how you do it, what it means, and why you do it.



Major Topics:

  • Recourse debt allocations
  • Constructive liquidation scenarios
  • Nonrecourse debt allocations
  • Minimum gains and nonrecourse deductions
  • Section 704(c) gains
  • Allocations under 704(c)

Learning Objectives:

  • State how debt allocations affect the calculation of a partner’s basis in the partnership
  • Recognize how recourse and nonrecourse debt are allocated to partners
  • Identify the tax effects of 704(c) on contributed property

Who should take this course:

Tax practitioners who are looking to improve their knowledge of debt allocations and how they affect a partner’s tax basis

Working knowledge of fundamental partnership tax concepts

None

Yes

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No

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