Most practitioners deal with Form 1065, U.S. Return of Partnership Income, on a regular basis. This program examines partnership terminations, including statutory termination, mergers, consolidations, and divisions, and the two methods of accomplishing termination – the assets-over and assets-up formats. It 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.

This program includes expert analysis by Ian J. Redpath, JD, LLM, and Michael J. Tucker, LLM, CPA, on audio and video.

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 begin by watching the streamed video segment, if any, or listening to the streamed audio segment, if any, 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. After the user has studied each chapter, s/he should click on the link at the left to complete the interactive study questions. 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 streamed video, if any, or listening to the streamed audio, if any, 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 video/audio, if any, 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.

Chapter 1 takes a look at statutory terminations and technical terminations of partnerships, when a partnership taxable year closes as a result of termination, and the effect of an IRC §754 election on the bases of partnership assets.

Chapter 2 examines the IRS regulations governing partnership mergers and consolidations, the operation of mergers and consolidations, and the reporting requirements for the merging or consolidating partnership and resulting partnership.

Chapter 3 describes the assets-over and assets-up forms of mergers and consolidations, the differences between the two forms and the differences in adjusted bases of assets as a result of each form, the negative tax consequences of the assets-over form, and how to treat a merger as a single transaction.

Chapter 4 discusses partnership divisions, including continuation and noncontinuation of the prior partnership, liquidation of noncontinuing partnerships, and the reporting requirements for the continuing and noncontinuing partnerships.

Chapter 5 explains the assets-over and assets-under forms of partnership division.

Chapter 6 addresses the key concepts of transfers of partnership interests such as which party recognizes gain under IRC §741 in a sale or exchange, how to determine the amount of gain or loss from disposition, the required adjustments to the transferring partner's basis, IRC §751 "hot assets," which form to file when a sale or exchange of partnership interest contains IRC §751 assets, and when a partnership taxable year closes under IRC §706.

Chapter 7 explores the various ways to exchange a partnership interest, including exchanging a partnership interest for a different partnership interest, exchanging a partnership interest for another interest in the same partnership, exchanging a partnership interest for corporate stock, and the effect of an IRC §754 election.

Chapter 8 discusses the IRS guidance for payments to retiring partners, the amounts that may be included in payments to a retired or deceased partner's successor in interest, the purpose of IRC §736, and characteristics of payments under IRC §736.

Chapter 9 addresses gifting and contributing partnership interests, such as the factors that may have a tax effect for the donor, the difference between gifting or contributing a partnership interest that is free of liabilities versus one that is encumbered by debt, the two transactions that occur when a taxable gain exists, and the effect on accumulated suspended passive activity losses of gifting a partnership interest. It also addresses the rules surrounding contributing a partnership interest to a charitable organization and the process involved in determining the amount of allowable charitable deduction, the cases in which a charitable deduction would be denied, and the affect on accumulated suspended passive activity losses of donating a partnership interest.

Chapter 10 considers the three ways a partner may surrender her/his partnership interest, specifically, by forfeiture, by the determination that a partnership interest is worthless, and by abandonment. It also examines the proper way to treat a loss upon abandonment of a partnership interest, the factors that give rise to a deemed distribution, the results of abandoning a partnership interest in a partnership holding IRC §751 assets, the reporting requirements on a deceased partner's final tax return and on the decedent's successor in interest's tax return, the general rules regarding a decedent's gross estate, and the successor in interest's basis in the partnership interest.

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 publication 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 provides practical advice that may be used to help improve client service or service to the practitioner's organization.

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)