University of Illinois at Urbana-Champaign
Taxation of Business Entities II: Pass-Through Entities
University of Illinois at Urbana-Champaign

Taxation of Business Entities II: Pass-Through Entities

This course is part of U.S. Federal Taxation Specialization

Taught in English

Some content may not be translated

7,510 already enrolled

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Course

Gain insight into a topic and learn the fundamentals

4.8

(78 reviews)

Intermediate level
Some related experience required
35 hours (approximately)
Flexible schedule
Learn at your own pace
Progress towards a degree

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Assessments

56 quizzes

Course

Gain insight into a topic and learn the fundamentals

4.8

(78 reviews)

Intermediate level
Some related experience required
35 hours (approximately)
Flexible schedule
Learn at your own pace
Progress towards a degree

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This course is part of the U.S. Federal Taxation Specialization
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There are 9 modules in this course

In this module, you will become familiar with the course, your instructor and your classmates, and our learning environment. This orientation will also help you obtain the technical skills required to navigate and be successful in this course.

What's included

3 videos5 readings1 quiz1 discussion prompt1 plugin

In this module, you will be introduced to partnerships. We will delve into the formation of partnerships along with the characteristics that differentiate this form of business from other U.S. entities. This module focuses on the eligibility of legal ‘persons’ to form a partnership and the nonrecognition provisions and holding periods that apply to the contribution of such capital. Exceptions to the nonrecognition rules will be highlighted along with additional elections and treatments available to partnership formation.

What's included

17 videos1 reading11 quizzes1 discussion prompt

In this module, you will be introduced to the operations of a partnership. We will examine how the operations of a partnership are a conduit by which transactions “pass through” to the partners. The module focuses on how the partnership measures and allocates the income based on the partner’s distributive share in accordance with the appropriate means of reporting. Next, we will discuss the appropriate adjustments to the partner’s outside tax basis in relation to the income, loss, and liability claims of the partnership. Finally, we will discuss the loss and related party limitations imposed on the partnership.

What's included

13 videos1 reading6 quizzes

In this module, you will be introduced to the tax treatments of partnership distributions. We will first determine what is a distribution and how it is different from a partner’s share of partnership earnings. Partnership distributions will be further classified into proportionate operating, proportionate liquidating, and disproportionate distributions. We will then discuss the nonrecognition principle of partnership distributions, loss limitations, and exceptions to these general rules.

What's included

18 videos1 reading8 quizzes

In this module, you will be introduced to the tax consequences of selling and terminating a partnership interest. We will explore the tax consequences to the buyer and seller in a transaction to sell a partner’s interest. You will learn to differentiate between sales subject to capital and ordinary gain. Since the partner’s capital account and tax basis often differ at the point of sale, you will learn about the § 754 election, which allows the buyer to step up the inside basis in the partnership. Finally, we will discuss the implications of partnership termination.

What's included

13 videos1 reading6 quizzes

In this module, we will examine the concepts of pass-through entities with an introduction to other pass-through business models. We will analyze limited liability companies (LLC), limited liability partnerships (LLP), family partnerships, and Subchapter S corporations (S corp). We will discuss the unincorporated nature of the LLC, which offers both the limited liability of a corporation and the tax implications of a partnership. Next, we will discuss LLP and family partnership. We will also explore the increased limitation to liability and eligibility requirements necessary. Finally, we will analyze the qualifications and procedures for a corporation to elect S corporation status.

What's included

10 videos1 reading7 quizzes

In this module, we will further examine the specifications of electing S corporation status. We will explore income measurement and allocation methods followed in passing through the earnings to the shareholders; including the differentiation between ordinary items and separately stated items. Next, we will discuss the calculation of the shareholder’s basis in the S corporation and how it is adjusted in accordance with company earnings. We will also explore loss limitations with respect to the shareholder’s tax basis and at-risk basis. Accordingly, you will be introduced to the implications of distributions from the company to the shareholder with special tax consequences. Finally, we will discuss the exceptions that subject the pass-through to entity level tax.

What's included

14 videos1 reading6 quizzes

In this module, you will examine the ethical guidelines that encompass the professional tax practice. It will begin with a discussion of the mission and authority of the Internal Revenue Service (IRS), the enforcement agency overseeing the professional tax industry. Next, we will highlight the various penalties that can be assessed at the taxpayer level, both civil and criminal. Finally, you will be introduced to the ethical standards imposed upon tax advisors: Circular 230 and AICPA standards.

What's included

12 videos1 reading10 quizzes

In this module, you will apply the concepts learned from previous lessons on corporate and pass-through entities to designed scenarios. You will analyze organizational form dilemma and four organizational form choices. The module will conclude with a summary and recommendation.

What's included

7 videos4 readings1 quiz1 discussion prompt1 plugin

Instructor

Instructor ratings
4.8 (24 ratings)
Michael P Donohoe, PhD, CPA
University of Illinois at Urbana-Champaign
2 Courses15,471 learners

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This course is part of the following degree programs offered by University of Illinois at Urbana-Champaign. If you are admitted and enroll, your coursework can count toward your degree learning and your progress can transfer with you.

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4.8

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Reviewed on Apr 4, 2024

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