Advanced Tax Strategies for LLCs and Partnerships

Larry Tunnell, Ph.D., CPA, is a professor in the accounting department at New Mexico State Univeristy. Robert Ricketts, Ph.D., CPA, is the Frank M. Burke Chair in Taxation, Department Head of Accounting at the Rawls College of Business, Texas Tech University. He has written numerous books on the taxation of partnerships and limited liability companies.

Chapter 1 1-1

Allocation of Partnership and LLC Income Under Section 704(b) 1-1

Economic effect: The general test 1-3

Deemed economic effect 1-12

Alternate test for economic effect 1-13

Substantiality 1-17

Denied allocations: Determining the partners’ or LLC members’ interests in the entity 1-22

Other issues 1-25

Allocation of deductions attributable to nonrecourse debt 1-30

Summary 1-35

Chapter 2 2-1

Allocations With Respect to Contributed Property: Section 704(c)(1)(A) 2-1

The traditional method 2-4

The traditional method with curative allocations 2-12

The remedial allocations method 2-15

Special rules 2-19

Summary 2-22

Chapter 3 3-1

Allocation of Partnership Recourse Liabilities Under Section 752 3-1

How liabilities affect partner tax consequences 3-2

Allocation of liabilities among the partners: In general 3-12

Allocation of recourse liabilities 3-15

Chapter 4 4-1

Allocation of Partnership Nonrecourse Liabilities and Related Deductions Under Sections 752 and 704(b) 4-1

Distinguishing between recourse and nonrecourse liabilities 4-2

Allocation of nonrecourse debts 4-7

Treatment of contingent liabilities 4-15

Chapter 5 5-1

Advanced Distribution Rules 5-1

Non-liquidating distributions generally 5-2

Distribution of multiple properties 5-7

Summary 5-18

Chapter 6 6-1

Adjustments to the Basis of Partnership or LLC Assets 6-1

Section 743: Adjustments following the transfer of a partnership interest 6-3

Distributions of partnership property 6-6

Allocating the adjustment amount among partnership properties 6-15

Chapter 7 7-1

Sale of an Interest in a Partnership or LLC 7-1

General tax consequences associated with sale 7-2

“Hot” assets and Section 751(a) 7-7

Collectibles and unrecaptured Section 1250 gain 7-12

Installment sales 7-14

Net investment income tax 7-16

Sale of an active (non-passive) interest in a partnership or LLC 7-17

Sale of a passive interest in a partnership or LLC 7-19

Purchaser of a partnership interest 7-20

Glossary Glossary 1

Index Index 1

Solutions Solutions 1

Chapter 1 Solutions 1

Chapter 2 Solutions 3

Chapter 3 Solutions 4

Chapter 4 Solutions 6

Chapter 5 Solutions 8

Chapter 6 Solutions 10

Chapter 7 Solutions 12