What date and form must partnerships file
March 15
Form 1065
What is the tax year for partnerships
1-same as partners
2-same as principal partners (5%)
3-calendar year
4-fiscal year (9/30,10/31,11/30 only)
Separately reported items
LT & ST capital gains/losses
charitable contributions
dividend income
foreign taxes paid
taxable income (loss)
Partner's basis in partnership when property is exchanged for interest
+Amount $$ contributed
+Adjusted basis of property contributed net of associated liabilities
+Gain, if any
+partner's share of liability assumed
Partnership's basis in property received in exchange for interest
+Partner's basis
+Gain recognized by partner
Basis of property distributed to a partner: nonliquidating
Basis to partnership prior to distribution
Basis of property distributed to a partner: liquidating
partner's basis reduced by cash received
gain/loss on exchange of property solely for stock
no gain/loss recognized
gain/loss on exchange of property and boot for stock
no loss, but yes gain
liabilities as boot
no gain but reduces basis in stock
shareholder's basis in stock (property exchanged for stock
adjusted basis of property transferred + gain recognized - net boot received
gain realized on exchange of property
FMV - adjusted basis
gain recognized on exchange of property
lesser of gain realized or boot received
filing requirements for Corporation
form 1120 due March 15
extend with for, 7004 for 6 mos.
deduction for organizational and startup costs
$5,000 for each but reduced $1 for $1 for expenses > $50,000
Remaining balance amortized 15 years
nonallowable costs for organizational and startup costs
anything to do with stock issuance
Dividend received deduction percents
<20% owned, deduct 70%
20-80% owned, deduct 80%
> 80% owned, deduct 100%
length of time to hold stock to be part of dividend rec'd deduction
45 days
charitable contributions limit & carryforward
10% of taxable income; 5 years forward
carryforward on capital gains/losses; treatment
back 3 years, forward 5; short term capital loss
carryforward of NOL
back 2 years; forward 20
Exempt orgs from AMT
< $5m gross receipts in 1st year
<$7.5m 3 year average
Adjustments to taxable income for AMT
long term contracts
installment sales
excess depreciation -- recalculate
basis adjustments
passive activities
certain loss limitations
Preferences for AMT
percentage depletion over adjusted basis
tax-exempt interest
appreciated property
intangible drilling costs
accelerated depreciation
AMT exemption for corps
$40,000
Reconcile book to taxes: Add to Book
federal income tax expense
excess capital losses
income -- prepaid rents, royalties, interest, service fees
expenses -- premiums on key-life insurance, gifts > $25, charitable contributions > 10%
Reconcile book to taxes: deduct from book
income not taxable -- interest on municipal bonds, key-life proceeds
expenses not on books -- dividend received deduction, charitable contribution carryover
Distributions from corporations are taxable to the extent of ________
earnings and profits
how are distributions to taxpayers treated
1 - dividends to earnings and profits
2 - ROC to basis
3 - capital gain
gain/loss recognized by stockholder on redemption
typically none
gain/loss recognized by shareholder in complete liquidation
extent that $ and FMV differ from basis
Credit for accumulated earnings
$250,000 + dividends pd - accum E&P
Personal holding companies: 2 tests
1 - income: 60% of AGI is passive
2 - stock ownership: >50% value o/s stock owned by <= 5 people
controlled group
parent-subsidiary and brother sister
affiliated group
parent-subsidiary -- may file consolidated
Eligibility to be a S-Corp
no more than 100 shareholders (family = 1)
one class of stock
Fringe benefits to S-Corp employees
provided to > 2% shareholder-employee, must be included in SH income
3 ways to terminate S-Corp
consent of majority of SHs
passive income > 25% receipts for 3 years
re-election of S-Corp status after terminated
5 years
