Passive Activity Loss Rules for Flow-Through Entities
Target Audience: CPAs, EAs
Field of Study: Taxation (NASBA); Federal Tax/Tax Related Matters (IRS)
Seminar Level: Beginner
IMPORTANT INFORMATION REGARDING CONTINUING EDUCATION CREDIT: THE IRS RETURN PREPARER OFFICE ACCEPTS THIS SEMINAR FOR ONE (1) CONTINUING EDUCATION CREDIT FOR ENROLLED AGENTS (EA) AND ANNUAL FILING SEASON PROGRAM PARTICIPANTS. IF YOU ARE NOT AN ENROLLED AGENT OR AN ANNUAL FILING SEASON PROGRAM PARTICIPANT, PLEASE CONSULT WITH YOUR RESPECTIVE STATE LICENSING AGENCY REGARDING ACCEPTABILITY OF THIS CREDIT.
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DISCLAIMER: THIS SEMINAR WAS FILMED IN san diego, california, ON JULY 17, 2014, AND THE INFORMATION WAS CORRECT AT THE TIME OF RECORDING.
The Small Business/Self-Employed operating division delivered this seminar at the 2014 IRS Nationwide Tax Forum.
This presentation includes a detailed discussion on the proper tax treatment of K-1’s flowing from a 1065, 1120S, or 1041, including: definition of each activity under IRC 469; material participation requirements; economic grouping rules under 1.469-4; implication of IRC 1411 (3.8% surtax under ACA); reporting and disclosure by the entity required on the K-1 to identify and track each activity; and proper activity-based reporting on the Form 1040. The session does not include a discussion of basis or at-risk.
- Identify the regulation that limits regrouping of activities in subsequent years
- Differentiate between the seven material participation tests
- Recall the limitations of partners and shareholders under IRC section 469
- Recognize why activities need to be separated on the Schedule K-1
No prerequisites or advanced preparation are required for this seminar.
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