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 2009

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

CPE CREDIT:
10 QAS Hours, 10 Registry Hours

CTEC CREDIT:
5 Federal CTEC Hours, 0 California Hours

CTEC credit hours are half the number of CPE credit 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 selfstudy. You may also visit the NASBA website at www.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 half the number of CPE credit hours

FIELD OF STUDY:
Taxes

EXPIRATION DATE:
Postmarked by December 31, 2010

KNOWLEDGE LEVEL:
Intermediate

LEARNING OBJECTIVES

Chapter 1: Overview of Limited Liability Companies
Completion of this chapter will enable you to:

• Describe the operation of an LLC, its uses and potential advantages, and the tax treatment of an LLC.

• Define limited liability partnership and describe its advantages.

• Describe when an entity will be taxed as a partnership and how to avoid penalties when partnership returns are inadvertently filed late.

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

• Recognize the reporting requirements of nonseparately stated income or loss and separately stated items.

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

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

• Recognize and determine the effect of the at-risk rules and the favorable aspect of qualified nonrecourse debt.

• Apply the passive activity rules, including the passive nature of rental activities and the treatment of passive income subject to recharacterization.

• Identify the issues transacting with partners (or members) including guaranteed payments, SE tax and other expenses.

• Discuss the effects of making a Section 754 election and calculate the adjustment.

• Determine the tax treatment when distributions are made to the partner and explain the recent mandatory adjustment rules on certain built-in loss assets.

• Determine the operating and taxation of estates and trusts, including the use of revocable living trusts with irrevocable trusts.
• Identify estate planning strategies.

• Describe how residences acquired by gift or inheritance are treated for tax purposes and how capital gains are allocated between the fiduciary and the beneficiaries.

• Analyze the items that make up income and deductions in respect of a decedent and compute the estate tax deduction.

• Explain how interest expense is classified and treated for tax purposes and when expenses must be allocated to tax-exempt income.
• Apply the rules relating to the net operating loss deduction and when to deduct administrative 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 and recognize when the estate or trust is subject to the estimated tax payment requirements.