Surgent's Four Tiers of Loss Limitations: A Guide to the Rules for Pass-Through Entities
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.
Highlights
- The Inflation Reduction Act of 2022
- 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 excess business loss limitation of the Tax Cuts and Jobs Act of 2017 (new §461(l)), American Rescue Plan Act, and Inflation Reduction Act
Prerequisites
Basic familiarity with loss allowance rules of pass-through entities
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.
Objectives
- 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
Preparation
None
Notice
This course is offered by a 3rd party vendor and will not be accessible in the My CPE Tracker section of the ISCPA website. Course access information will be emailed directly to you by Surgent Professional Education.
Leader(s):
Leader Bios
Mike Frost
Mike Frost, CPA, of Jacksonville, Alabama, provides tax consulting, continuing education, and motivational speaking services through his company, Mike Frost Enterprises. Mike is a former shareholder of MDA Professional Group, PC, where he managed the tax department of the Albertville office. Mike has 31 years of experience in public accounting, including but not limited to: Business and individual income tax preparation and planning; mergers and acquisitions; estate, gift, and trust tax preparation; small business consulting; Medicare planning and other elder care; audit representation; and religious groups and clergy. Mike has conducted CPE engagements and seminars throughout the United States and has served as technical advisor for tax articles in The Sand Mountain Reporter, a local newspaper. Mike has been a featured presenter at the Alabama Society of CPAs Annual Meeting and the Federal Tax Clinic held annually at the University of Alabama in Tuscaloosa. Mike graduated with “high honors and distinction” from Jacksonville State University with a major in accounting, a minor in finance, and a 4.0 GPA. He is a member of the American Institute of Certified Public Accountants and the Alabama Society of Certified Public Accountants. In addition, he is a graduate of the Tax Planning and Advising for Closely Held Businesses Certificate of Educational Achievement Program sponsored by the AICPA.
Non-Member Price $209.00
Member Price $159.00