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Wednesday, November 10, 2021 Live Webcast

Four Tiers of Loss Limitations: A Guide to the New Rules for Pass-through Entities (E2111292)

1:15 PM - 4:45 PM EDT

Registration: 12:45 PM EDT

webcast

Vendor Platform

4 CPE Credits in TX

OVERVIEW

Owners of S corporations and partnerships are subject to numerous limitations on pass-through losses, each with unique rules, applications, and complexities. With the increase in popularity of pass-through business entities, it is essential for CPAs to understand the complexities and interactions of these pass-through loss limitations.

This course features a live instructor and has been specifically designed for the NJCPA.

DESIGNED FOR

Experienced practitioners who desire a refresher on loss limitations and an analysis of the new rules. Inexperienced practitioners who desire to learn the basics of all four pass-through loss limitations and their interactions in one course.

BENEFITS

  • Analyze how basis in an ownership interest in a pass-through entity is established
  • Discuss how activity of the entity, distributions, and optional adjustments increase or decrease basis
  • Discuss when basis is "at-risk" under Section 465, and the resulting loss disallowance and carryforward related to basis that is not at-risk
  • Define passive activities under Section 469 and exceptions to the passive loss rules
  • Discuss when and how aggregation of activities should be used to avoid the passive loss rules
  • Analyze §461(l) created by the Tax Cuts and Jobs Act of 2017 and understand the limitation calculation and resulting carryforward
  • Analyze the hierarchy of the loss limitations with examples of the application of the four tiers of losses and how they interact
  • Use case studies to reinforce the learning objectives

HIGHLIGHTS

  • Tier 1: Basis limitations for S corporation shareholders and partners
  • Tier 2: Section 465 at-risk limitations for S corporation shareholders and partners, including the impact of debt, indemnities, guarantees, and shareholder/partner agreements
  • Tier 3: Section 469 passive loss limitations and exceptions to the limitations
  • Tier 4: The new excess business loss limitation of the Tax Cuts and Jobs Act of 2017 (new Section 461(l)) and a look into possible changes to the deduction in the future

COURSE LEVEL

Intermediate

PREREQUISITES

Basic familiarity with loss allowance rules of pass-through entities

ADVANCE PREPARATION

None

ADDITIONAL NOTES

  • Qualifies for IRS credit

INSTRUCTOR

John Sherrick

John M. Sherrick, CPA, MA

Surgent Professional Education

John N. Sherrick, MA, CPA John N. Sherrick is a partner of Sitrick & Associates, LLC in Bettendorf, Iowa. He prepares tax returns and financial statements for closely held companies and their owners. He also provides a variety of income tax, retirement, and estate-tax planning services for his clients. He also serves as an expert witness for business valuations and other tax and accounting issues. He is also a discussion leader for continuing education courses in the tax arena on a national level. John was recognized by the NCACPA as an Outstanding Seminar Speaker for 2013, and he is also the recipient of the 2011 James L. McCoy Discussion Leader of the Year Award as well as a Surgent Outstanding Discussion Leader Award. John has over 45 years of experience in public accounting with local firms. His experience includes a wide variety of tax and accounting issues for small businesses in a number of industries. He also has had experience in auditing and taxation of not-for-profit organizations on the local and national level. Sherrick received his Bachelor’s degree in Economics and Business Administration from Knox College in Galesburg, Illinois. He then received his Master’s degree in Accounting from the University of Iowa, in Iowa City, Iowa. He is licensed in both Iowa and Illinois and is a member of the Iowa Society of CPAs and the Illinois CPA Society.