Guide to Understanding the At-Risk Basis Rules and Forms 6198 and 7203

Overview

You could pay $0 for this course!

This course qualifies for EA/IRS and CFP credit. If you need EA/IRS credit, please contact Tyler Dion (tdion@masscpas.org) after you have registered and provide him your PTIN number.

Many tax clients with losses from their S corporations, partnerships, and multiple-member LLCs treated as partnerships will want to use these losses to offset their other income from other sources. This program explains when, why, and how the at-risk rules apply to allow or to prevent the owner of a pass-through entity from taking a loss from a pass-through entity and using it to offset other income. This program is extremely helpful for anyone with pass-through entity clients.

This course qualifies for reimbursement through the state’s Workforce Training Express Fund. Firms/companies with fewer than 50 staff can be reimbursed up to 100% of the cost of training and firms/companies with 50-100 employees can be reimbursed up to 50% of the cost of training. You must register for the course and apply for reimbursement through the Workforce Training Express Fund website a minimum of three weeks prior to the start of the course. The course code for this program is C-13021. To learn more, click here or contact Julia Ekelund at jekelund@masscpas.org.

Highlights

Basis and at-risk basis How to calculate the amount of annual at-risk basis Forms 6198 and 7203 When activities may be aggregated for at-risk purposes Qualified nonrecourse financing

Prerequisites

A basic understanding of the tax rules relating to partner basis and S corporation shareholder basis

Designed For

Any tax practitioner wishing to understand the at-risk rules and how they apply to losses allocated to the owners of pass-through entities

Objectives

Understand how a client determines his or her at-risk basis in his or her pass through entity Understand how the at-risk basis calculation differs from a regular basis calculation Calculate the amount of an investor’s annual at-risk basis Understand the structure of IRS Form 6198 and how it relates to calculating a taxpayer’s at-risk basis