Most practitioners deal with Form 1065, U.S. Return of Partnership Income, on a regular basis. This program provides an in-depth guide to the preparation of the partnership return, addresses some of the more significant issues that practitioners typically face, and offers suggestions that will help practitioners provide valuable services for their clients.

Use of Materials

Audio or DVD
The user should begin by watching the DVD segment or listening to the audio CD for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. It may be helpful to highlight important material and/or to make additional notes. Next, the user should complete the study questions at the end of the chapter and review the answers. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the DVD or listening to the audio CDs and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or DVD or audio CDs that were difficult. When the user is ready, s/he should complete the quizzer. Reviewing notes periodically will increase retention of the material.

Online
The user should follow the procedures discussed above. After the user has studied each chapter, s/he should click on the link at the left to complete the interactive study questions. When the user has finished reading the text, s/he may wish to review her/his notes and any sections that were difficult. When the user is ready, s/he should click on the link to the left to complete the quizzer. The user's CPE certificate will be provided immediately upon successful completion of the quizzer.

Software
The user should follow the procedures discussed above. As the user studies each chapter, s/he should complete the interactive study questions that appear in the lower panel of the screen. When the user has finished reading the text and working through the study questions, s/he may wish to review her/his notes and any sections that were difficult. When the user is ready, s/he should click on the link at the far left to complete the quizzer. The user should email her/his quizzer statistics using the quizzer submission link in the software and the user's CPE certificate will be mailed to her/him.

Chapter 1 considers the definition of a partnership, the impact of the check-the-box regulations, and the formation of a partnership.

Chapter 2 compares partnerships and corporations, then explains the calculation of basis, the at-risk rules, the passive activity rules, and other limitations.

Chapter 3 examines filing requirements, penalties, general information, elections, and partnership tax years.

Chapter 4 focuses on the various types of partnership income, as well as how to calculate separately stated and nonseparately stated income. The chapter also addresses cost of goods sold, the valuation of inventories, the uniform capitalization rules, and special considerations for partnerships.

Chapter 5 explores the multitude of deductions that may be available to the partnership, including compensation, repair and maintenance expense, amortization of start-up costs, expenses for retirement plans and employee benefit programs, travel and entertainment expenses, and depreciation.

Chapter 6 explores the balance sheet, the reconciliation of income per books with income per return, and the Schedule M-3.

Chapter 7 takes a look at the analysis of partners' capital accounts, as well as partnership reporting items, partnership allocations, and partnership minimum gain.

Chapter 8 examines partnership terminations, including statutory termination, mergers, consolidations, and divisions. The chapter also explores transfers of partnership interests, including exchanges, retirement of a partner, gift or contribution of a partnership interest, abandonment of a partnership interest, and death of a partner.

Chapter 9 addresses distributions, including property distributions, loss on distribution, sales of contributed property, and distributions of property to a contributing or noncontributing partner, liquidating distributions, disproportionate distributions, allocation of basis, and basis adjustments.

Chapter 10 takes a look at self-employment taxes for partners and LLC members and provides an overview of the state treatment of partnerships and limited liability entities. Tables are included that (1) compare the legal aspects of various forms of business entities, (2) compare the state treatment of LLCs and LLPs, and (3) summarize the states with net-worth or debt-based corporate franchise taxes.

The Appendix explains how to obtain 2009 IRS forms.

Throughout this program, the user will find explanations and discussions regarding some of the issues that often face practitioners. In order to enhance the user's comprehension of the material and highlight important practical considerations, this program includes the following designations:

A Biskalert is intended to warn the practitioner of a particular situation that may require action or other consideration by the taxpayer or the practitioner on behalf of the taxpayer.

A Biskpoint presents analysis or commentary that attempts to explain or clarify statutory or regulatory authority or decisions by the judiciary.

A Bisktip provide practical advice that may be used to help improve client service or service to the practitioner's organization.

• Explain what constitutes a partnership, and identify the various types of entities that are taxed as partnerships and the various types of partners

• Describe the advantages and disadvantages of using a partnership, apply the at-risk limitations, identify passive activity loss limitations, calculate a partner's basis, and explain the IRC §754 election

• Discuss basic rules on filing, including extensions; explain the general information required on the return; describe the accounting methods and tax accounting periods available to partnerships

• Calculate and report partnership income, including income from forgiveness of partnership debt; apply the various inventory valuation methods and the uniform capitalization rules; calculate cost of goods sold; and complete Schedule A

• Determine the various business deductions for a partnership, including depreciation expense, and explain how the IRC §199 deduction impacts partnerships and partners

• Properly classify balance sheet items, discuss the reconciling items required to adjust book income reflected in the balance sheet to taxable income, and explain the filing requirements for Schedule M-3

• Describe how book and tax capital accounts are impacted by contributions of capital, distributions, and operations; describe how partnership flow-through concepts are affected by specific deduction limitations and specific classes of taxpayers; discuss passive activities; assess whether allocations have "substantial economic effect"; and explain partnership minimum gain

• Determine when a partnership will terminate and discuss the implications of partnership termination, and explain the tax consequences of partnership mergers, divisions, and the transfer of a partnership interest

• Explain the tax consequences of distributions to partners, including distributions of appreciated property and hot assets; describe the tax consequences of liquidation of a partner's interest; and define a "substantial basis reduction"

• Explain the application of the self-employment tax to partners, identify the current position of the Internal Revenue Service regarding SE tax in partnerships/LLCs, and discuss the general state treatment of partnerships and limited liability entities

Ian J. Redpath, JD, LLM, is a nationally recognized tax attorney and consultant from Buffalo, New York. He is a principal in the Redpath Law Offices in Buffalo and New York City where he specializes in tax litigation matters. Mr. Redpath has published numerous articles on contemporary tax issues and co-authored several books. He has extensive national and international experience in developing, writing, and presenting professional CPE programs. Mr. Redpath holds a Bachelor's degree from Hillsdale College, a JD from the University of Detroit, and an LLM (tax emphasis) from the University of Wisconsin. In addition to his active tax practice, he serves as an Associate Professor of Taxation at Canisius College in Buffalo. (Contributing Author/Speaker)

Michael J. Tucker, LLM, CPA, is a consultant with the accounting firm of T.M. Byxbee Company, P.C., in Hamden, Connecticut. In his practice, Mr. Tucker handles a wide variety of client transactions, including mergers and acquisitions, entity formations and dissolutions, and distributions to owners/shareholders/partners. He is also a Professor of Accounting at Quinnipiac University in Hamden, Connecticut. Author of over 100 articles and books dealing with various tax topics, Mr. Tucker is a frequent lecturer at conferences and seminars throughout the country. Recently, Mr. Tucker has expanded his practice and lecturing to include topics related to the workplace, including sexual harassment and employer/employee relations. He holds an LLM in Taxation from Georgetown University Law Center, a Juris Doctorate from New York University School of Law, a PhD in Accounting from University of Houston, and an MBA from New York University. (Contributing Author/Speaker)