Allocating Partnership/LLC Income, Losses and Debt to Partners Webcast | 4193338E STARTS AT 6:30 AM PDT

Date :
November 8, 2019 6:30 AM - 10:00 AM
Location :
Facility :
Webcast Rebroadcast
Level of Difficulty :
Member Price :
Nonmember Price :
CPE Credits :
CPE 4.00, MCLE 3.00, IRS-TX 4.00, CTEC-TX 4.00, MCLE LS-TX 3.00
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The course focuses on three major issues that involve allocations by partnerships to partners:  (1) assuring that allocations to partners have substantial economic effect under section 704(b); (2) the proper treatment of forward and reverse built-in gains or losses under section 704(c); and (3) the proper characterization of debt and the appropriate allocation of such debt to the partner/LLC members pursuant to section 752.

Attendees will review case studies illustrating the inherent interrelationship of these three subjects and review sample partnership/LLC agreement language.

Note: Course materials include an e-book and PowerPoint slides that reinforce concepts and will be available to attendees.

Materials are provided as an ebook for this course.


  • Understand when allocations to partners have "substantial economic effect".
  • Recognize the difference between book and tax basis capital accounts.
  • Distinguish the Treasury Method from the Target Method of allocating profits and losses to partners and understand the pros and cons of the two methods.
  • Understand when and why a partners have a negative capital account.
  • Recognize terminology in partnership agreements such as “partnership minimum gain," “partner minimum gain," “partnership nonrecourse deductions” and “partner nonrecourse deductions."
  • Recognize and understand the importance of a “minimum gain chargeback” and a “qualified income offset” in a partnership agreement.
  • Determine when capital accounts can be optionally revalued and the impotance of such revaluation.
  • Identify the “ceiling rule” and understand the three regulatory methods of making section 704(c) allocations.
  • Distinguish recourse debt from nonrecourse debt, and qualified nonrecourse financing.
  • Determine how to properly report each partner’s debt share on IRS Schedule K-1.

Major Subjects:

  • Allocating income, gain, deductions and losses under section 704(b).
  • Understanding the Target Capital Account Method and comparing it to the Treasury Method.
  • Allocations of built-in gain or loss pursuant to section 704(c).
  • Properly characterizing debt as recourse, nonrecourse, or qualified nonrecourse financing.
  • Allocating debt to the partners pursuant to section 752.

Advanced Prep:


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Level of Difficulty:
Field of Interest:

General knowledge of partnership taxation.

Designed For:

Attorneys and CPAs.


Gary R. McBride, CPA, Esq.

Gary McBride is a principal in Summit Accountancy Group, Inc.; a professor emeritus at California State University, East Bay; and former director of the Graduate Tax Program. He is a licensed attorney and certified public accountant. He worked for the Internal Revenue Service as a revenue agent, special agent, and technical advisor at the IRS National Office. He is author and presenter of four CPE courses for the CalCPA Education Foundation: Federal and California Tax Update for Individuals (with professor Annette Nellen); Federal and California Tax Update for Businesses and Estates (with professor Annette Nellen); Partnerships and LLCs Part I: Formation, Operation, and Allocations; and Federal Taxation of Partnerships and LLCs Part II: Sales, Distributions, Redemptions, and Liquidations. McBride earned his master of laws in taxation degree in 1987 from Georgetown University; his juris doctor degree in 1981 from Hastings College of Law, and his bachelor’s degree (emphasizing accounting and finance) in 1975 from the University of California, Berkeley.

No Agenda or Materials posted.