Transactional Tax Basis Capital Reporting

EVENT DESCRIPTION

Partnerships must now report all partners’ capital accounts on a tax basis. After a few false starts, the IRS has settled on use of the “transactional” approach to tax basis capital accounts. This seems fairly simple at first impression. The entries for specific transactions are made on a tax basis. Capital falls out from these entries. However there are many transactions that present challenging interpretations for capital account reporting.

This session will examine the reasons for use of tax basis capital, as the reasons will allow a “logical” interpretation of how entries should be made. It will address basic transactions, but also issues such as reporting the effects of PPP loans, opportunity zone investments, section 734 and 743 basis adjustments, distributions that trigger partner section 704(c) gain, and disguised sale transactions.

This two-hour CPE course, presented by James Hamill, CPA, Ph.D., presents an approach to dealing with transactions of a partnership that do not lead to an immediate answer to the proper tax capital reporting.