Preparing Partnership Returns

PROGRAM CONTENT

The course provides continuing professional education (CPE) to enhance competence in preparing income tax returns for partnerships. Subject matter includes basics of partnership taxation, preparation of Form 1065, U.S. Return of Partnership Income, accompanying forms and schedules, flow-through income and deductions for partners, and end of a partnership.

CPE CREDIT HOURS

4 Credit Hours. One 50-minute period equals one CPE Credit Hour.

LEARNING OBJECTIVES

• Basics of Partnership Tax Return Preparation
  • 1-A Recognize the similarities between reporting income and expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), and Form 1065, U.S. Return of Partnership Income.
  • 1-B Identify partnership income that is subject to self-employment tax.
  • 1-C Compute a partner’s basis in his or her partnership interest.
  • 1-D Differentiate a partner’s capital account from a partner’s basis in the partnership.
  • 1-E Recognize differences between current distributions and liquidating distributions of a partnership.
• Partnership Scenario - Day One Through End of Year
  • 2-A Recognize allocation issues associated with the setup of a partnership.
  • 2-B Differentiate between a partner’s distributive share of income and guaranteed payments.
  • 2-C Distinguish amortizable organizational costs and start-up costs.
  • 2-D Recognize the proper treatment of qualified unreimbursed partnership expenses on a partner’s individual income tax return.
  • 2-E Compute short-year depreciation for the first year of the partnership’s existence.
• Comprehensive Partnership Example - Preparing Form 1065
  • 3-A Determine the required tax year for a partnership.
  • 3-B Reconcile a partnership’s payroll report to extract amounts necessary to report on Form 1065, U.S. Return of Partnership Income.
  • 3-C Identify the proper lines to report income and expense items on the partnership return.
  • 3-D Recognize items which are separately stated and flow directly through to partners on Schedule K-1.
  • 3-E Transfer partnership items from a partner’s Schedule K-1 to the partner’s Form 1040 and supporting schedules.
• End of a Partnership
  • 4-A Determine classes of assets upon sale of a business and for reporting on Form 8594, Asset Acquisition Statement Under Section 1060.
  • 4-B Differentiate asset allocations favoring the buyer or the seller in the sale of a business situation.
  • 4-C Recognize gain or loss on the sale of a partnership.
  • 4-D Identify items to report on a partner’s tax return upon sale of the partnership.
  • 4-E Identify issues likely to be addressed in the case of an IRS audit relating to sale of a partnership.

RECOMMENDED PARTICIPANTS

Tax professionals who prepare individual income tax returns are encouraged to participate in this course.

PROGRAM LEVEL

Basic. This course provides information on a knowledge level most beneficial to tax professionals who are new to a skill or attribute, such as staff or entry level personnel. It may also benefit a seasoned professional with limited exposure to the area.

*All CE hours issued by The Tax Book