Tax Loss Limitations Imposed on Individuals & Pass-through Entities

Overview

Tax practitioners advising their business clients must be fully informed regarding the multiple loss limitation provisions that apply to individuals conducting businesses and pass-through entities. This program covers the loss limitation rules that tax practitioners must know in order to advise their individual and pass-through entity clients fully and adequately as to when and if a loss limitation applies. The loss limitations discussed in this program start with an introductory discussion of hobby-loss rules and graduate to a more substantive discussion of the remaining loss limitations: basis limits, at-risk rules, passive-loss limits, excess business-loss limits, net operating losses, and the Section 163(j) interest limitation. Knowing when loss limits apply is essential for any tax practitioner. This program will put you in a position to advise clients fully and intelligently regarding each of the loss limits.

Learning Objectives:

• Recognize the impact of partner/S corporation's shareholder basis on the ability to take losses.
• Advise clients regarding the taking of losses from pass-through entities.

• How to calculate a partner or S corporation shareholder's basis
• Form 7203 and an S corporation shareholder's basis
• The at-risk basis rules and Form 6198
• The passive-activity loss limits
• The Section 461(l) loss rule
• The net operating loss limitation rules
• The Section 163(j) business interest limitation