Objective
- Analyze how basis in an ownership interest in a pass-through entity is established
- Discuss how activity of the entity, distributions, and optional adjustments increase or decrease basis
- Discuss when basis is "at-risk" under Section 465, and the resulting loss disallowance and carryforward related to basis that is not at-risk
- Define passive activities under Section 469 and exceptions to the passive loss rules
- Discuss when and how aggregation of activities should be used to avoid the passive loss rules
- Analyze §461(l) created by the Tax Cuts and Jobs Act of 2017 and understand the limitation calculation and resulting carryforward
- Analyze the hierarchy of the loss limitations with examples of the application of the four tiers of losses and how they interact
- Use case studies to reinforce the learning objectives
Highlights
- The Inflation Reduction Act of 2022
- Tier 1: Basis limitations for S corporation shareholders and partners
- Tier 2: Section 465 at-risk limitations for S corporation shareholders and partners, including the impact of debt, indemnities, guarantees, and shareholder/partner agreements
- Tier 3: Section 469 passive loss limitations and exceptions to the limitations
- Tier 4: The excess business loss limitation of the Tax Cuts and Jobs Act of 2017 (new §461(l)), American Rescue Plan Act, and Inflation Reduction Act
Designed For
Experienced practitioners who desire a refresher on loss limitations and an analysis of the new rules. Inexperienced practitioners who desire to learn the basics of all four pass-through loss limitations and their interactions in one course.Prerequisite
Basic familiarity with loss allowance rules of pass-through entitiesAdvanced Preparation
None