Pass-throughs (S corporations and Partnerships) are the most popular choice of newly formed business entities. However, for years, taxpayers and their preparers have struggled to correctly calculate, update, and maintain the pass-through entity owners’ tax basis information in each investment. Calculating and accounting for tax basis and adequately reporting the impact of operating and liquidating distributions for these entities are among the most frequently cited audit deficiencies. Taxpayers have also misapplied the tax rules when calculating the gain or loss from the sale of the interest.

Recently, the IRS initiated enforcement initiatives designed to audit owners of pass-through entities regarding their calculations of tax basis and their tax treatment of distributions. This course will teach you how to properly account for both items for your clients who own an interest in a partnership or an S-corporation. Learn to identify the most common mistakes and errors and report these items correctly before your client is audited. 

Formerly Titled: Basis Calculations & Distributions for Pass-Through Entity Owners: Comprehensive (Forms 1065 and 1120S)