Self-Study

Surgent's Four Tiers of Loss Limitations: A Guide to the Rules for Pass-Through Entities

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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.

Major subjects

• The Inflation Reduction Act of 2022
• Tier 1: Basis limitations for S Corporations shareholders and partners
• Tier 2: Section 465 at-risk limitations for S Corporations 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 Section 461(l)), American Rescue Plan Act, and Inflation Reduction Act

Learning 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 Section 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

Who should take this program?

• 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.

Pricing

Our records indicate you are a nonmember. If you register, you will be charged $79.00 (Standard Nonmember Fee). Members: Please log in to receive member fee.