Based on the guidance from the PPC Tax Deskbook Series, this course uses a key issue approach in discussing income taxation related to estates and trusts, partnerships and LLCs.

TAXATION OF ESTATES & TRUSTS, PARTNERSHIPS, AND LLCS OVERVIEW COURSE DESCRIPTION:
This interactive self-study course discusses income taxation of LLCs, partnerships, and estates and trusts.

PUBLICATION / REVISON DATE:
November 2008

PREREQUISITE / ADVANCE PREPARATION:
Basic knowledge of taxation of LLCs, partnerships, and estates and trusts.

CPE CREDIT:
10 QAS Hours, 10 Registry Hours
10 CTEC Federal Hours, 0 CTEC

California Hours Check with the state board of accountancy in the state in which you are licensed to determine if they participate in the QAS program and allow QAS CPE credit hours. This course is based on one CPE credit for each 50 minutes of study time in accordance with standards issued by NASBA. Note that some states require 100-minute contact hours for self study. You may also visit the NASBA website atwww.nasba.org for a listing of states that accept QAS hours.

Enrolled Agents:
The CPE in this book is designed to enhance professional knowledge for Enrolled Agents. Gear Up is a qualified CPE Sponsor for Enrolled Agents as required by Circular 230 Section 10.6(g)(2)(ii).

CFP® CREDIT:
5 CE Hours – CFP® Credit hours are one half the
number of CPE credit hours

FIELD OF STUDY:
Taxes

EXPIRATION DATE:
Postmarked by December 31, 2009

KNOWLEDGE LEVEL:
Intermediate

LEARNING OBJECTIVES

Chapter 1: Limited Liability Companies (LLCs)
Completion of this chapter will enable you to:

• Describe the structure and operation of an LLC, its uses and potential advantages.
• Determine the tax treatment of an LLC under the check-the-box rules.

• Define limited liability partnership and describe its advantages.

• Explain the general requirements of partnerships and LLCs, and how to avoid penalties when
• partnership returns are inadvertently filed late.
• Describe when an entity will be taxed as a partnership

• Explain the election to file as a qualified joint venture, and list the reasons why the election should or should not be made.

• Recognize reporting requirements for partnerships.
• Differentiate between nonseparately stated income or loss and separately stated items.

• Differentiate between book capital and tax capital accounting.
• Identify the need to specially allocate partnership items among partners.

• Differentiate between recourse and nonrecourse debt.
• Explain how a partner’s basis is affected by increases and decreases in partnership liabilities.

• Recognize taxpayers affected by the at-risk rules.
• Identify the favorable aspects of qualified recourse debt.

• Apply the passive activity rules relating to partnerships.
• Explain when activities should be combined or separated.

• Define guaranteed payments and identify the resulting tax treatment to partners and the partnership.
• Identify the tax planning opportunities when deducting expenses paid by the partner on behalf of the partnership.

• Evaluate the benefits and drawbacks of the Section 754 election and explain the requirements relating to making the election.

• Differentiate between a distribution and a loan, and determine how the partnership and partner are affected when distributions are made to the partner.
• Identify when the recent mandatory adjustment rules on certain built-in loss assets apply.

• Determine the estate, gift, and generation-skipping transfer tax rates.
• Compare the benefits and drawbacks of revocable living trusts with irrevocable trusts and identify estate planning strategies.

• Explain the holding period and taxation of capital gains and losses and apply the rules relating to sales of depreciable property.
• Describe how residences acquired by gift or inheritance are treated for tax purposes and determine how capital gains are allocated between the fiduciary and the beneficiaries.

• Determine the basis of property acquired from a decedent and property received as a gift and explain the various exceptions to the basis rules.
• Apply the allocations necessary when a depreciation reserve is used.

• Define income in respect of a decedent, and list the items that make up income and deductions in respect of a decedent.
• Explain the purpose of the estate tax deduction.

• Explain how interest expense is classified and treated for tax purposes, and recognize when expenses must be allocated to tax-exempt income.
• Apply the rules relating to the net operating loss deduction, and determine whether to deduct administration expenses on the estate return or the income tax return.

• Calculate the distribution deduction, and apply the required limitations to the distribution deduction.

• Apply techniques to avoid the tax at the fiduciary level.
• Recognize when the estate or trust is subject to the estimated tax payment requirements.