July 20, 2022


8 Total CPE Credits


Pass-Through Owners' Basis and Distribution Rules: Comprehensive-Forms 1065 and 1120S

Learning Objectives

  • Calculate the stock and debt basis of S Corp shareholders.
  • Calculate the basis for partners and members of a partnership
  • Identify the three reasons for calculating a pass-through owners' basis.
  • Understand the new IRS capital account disclosure requirements on Schedule K-1.
  • Calculate pass-through losses allowed to an owner by applying the four-loss limitations (basis, at-risk, passive, and excess business loss limitations).
  • Determine the tax consequences of operating and liquidating distributions out of partnerships and S-corporations under multiple scenarios with several examples.
  • Determine if payment from a pass-through entity is treated as a distribution for tax purposes.
  • Calculate the tax gain or loss on the sale of a owners' interest in a pass-through entity.

Major Topics

  • Understand the four loss limitation rules applied on the owner's individual income tax return (I.e., basis, at-risk, passive, and excess business loss limitations).
  • Determine how to calculate an owners' initial tax basis of his pass-through entity
  • Learn how to correctly make annual adjustments to a pass-through owners' tax basis.
  • Discover how cash or non-cash distributions from a pass-through entity affect the basis calculations and whether they are taxable to the owners.
  • Compare the tax treatment of the sale of a shareholder's stock in an S corporation and a partner's interest in a partnership.
  • Learn what constitutes a debt basis for an S Corp shareholder.
  • Learn the tax ramifications of repaying loans to S Corp shareholders.
  • Learn how recourse and non-recourse debt is allocated to a partner and learn how this allocation affects a partner or member's basis calculations and amount at-risk.
  • Learn how to interpret a Schedule K-1 for items related to the calculation of basis.

CPE Credits Available

Total CPE

Things to Know About This Course


Basic understanding of individual income taxation

Advanced Preparation


Intended Audience

Tax Professionals.


California Society of CPAs

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