Wiley CPAexcel Exam Review 2014 Study Guide, Regulation

Module 37: Partnership Taxation

Overview

This module presents the federal tax treatment of partnerships and partners. The tax consequences of partnership formation are covered first, followed by a review of the pass-through of partnership income and loss to partners. A partner’s basis for a partnership interest is covered next, with emphasis on the effect of partnership liabilities on a partner’s basis. Next reviewed are the special rules that apply to transactions with controlled partnerships, as well as the limitations that apply to a partnership’s adoption of a tax year. The module continues with a review of the tax effects of a partner’s sale of a partnership interest, and concludes with a review of the rules that apply to a partnership’s distribution of property to partners in both current and liquidating distributions. It is important to be able to determine a partner’s basis for distributed property, as well as the effect of the distribution on the partner’s basis for the partnership interest.

A. Entity Classification

B. Partnership Formation

C. Partnership Income and Loss

D. Partnership Agreements

E. Partner’s Basis in Partnership

F. Transactions with Controlled Partnerships

G. Taxable Year of Partnership

H. Partnership’s Use of Cash Method

I. Termination or Continuation of Partnership

J. Sale of a Partnership Interest

K. Pro Rata Distributions from Partnership

L. Non-Pro-Rata Distributions from Partnership

M. Optional Sec. 754 Adjustment to Basis of Partnership Property ...