Taxation of Business Entities II: Pass-Through Entities from Coursera

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Syllabus

Introduction to 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.

Module 1 Partnership Formation

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.

Module 2 Partnership Operations

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.

Module 3 Partnership Distributions

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.

Module 4 Partnership Sales and Terminations

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.

Module 5 Other Pass-Through Entities

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.

Module 6 S Corporation Operations

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.

Module 7 Professional Tax Practice & Ethics

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.

Module 8 Strategic Organizational Form Choice

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.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Explores U.S. federal income taxation of pass-through business entities, which is a fundamental concept in accounting and tax law

Taught by Michael P Donohoe, PhD, CPA, who is recognized for their work in tax accounting

Develops knowledge of Subchapter S corporations, partnerships, and limited liability companies, which are core topics for tax professionals

Examines relevant provisions of Subchapters S and K of the Internal Revenue Code, which are essential for understanding pass-through taxation

Provides practical in-class study problems, which helps learners develop professional skills and attitudes in tax accounting

Covers partnership formation, operations, distributions, sales and terminations, which are comprehensive topics relevant to pass-through entities

Reviews summary

Tax law ii: pass-through entities

Learners say this course is well-taught and provides valuable content. Professor Donahue is frequently praised for his clear explanations and humor. Though most students had a positive experience, a few mentioned there were abandoned posts and illegible sections.

Engaging Experience

"It was an interesting class, especially the last unit where the pros and cons of the various entities were evaluated in a hypothetical example."

"very clear lectures"

Valuable Content

"Excellent content."

"This has been thorough and intense with respect to content and coverage of all that matters in every general business entity."

Clear Explanations

"Michael P Donohoe is a great professor and He explained all the tax provisions very nicely and covered almost the majority of concepts."

No Certificate Provided

"Course was completed but i dont have any certificate. how would i obtain my certificate?"

Illegible Sections

"i suggest that lecturer type out the answers instead of writing them, as it is more legible."

Abandoned Posts

"A good course but abandoned."

"No one is answering posts."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Taxation of Business Entities II: Pass-Through Entities with these activities:

Review Partnership Accounting Concepts

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Refresh your understanding of partnership accounting fundamentals to enhance your comprehension of tax implications.

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Review the basic principles of partnership accounting.
Analyze sample partnership financial statements.
Identify and understand the unique accounting treatments for partnerships.
Practice recording and interpreting partnership transactions.

Compile Course Materials

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Organize course syllabi, lecture notes, and other resources for easy access and review.

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Gather all materials from the course website and any additional sources.
Create a dedicated folder or notebook for course materials.
Organize materials by topic or module.
Highlight or annotate important concepts and definitions.

Organize and Review Course Materials

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Establish a systematic approach to managing and reviewing course materials for effective learning.

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Gather all relevant course materials, including lecture notes, readings, and assignments.
Create a well-organized filing system or digital folder structure.
Review materials consistently to reinforce understanding and identify areas for further study.
Annotate and summarize key concepts to aid in memorization and recall.

Two other activities

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Solve Partnership Income Allocation Problems

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Develop proficiency in calculating and understanding how partnership income is allocated among partners.

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Review the concepts of partnership income allocation.
Solve practice problems involving simple and complex income allocation scenarios.
Analyze the impact of different allocation methods on partner's capital accounts.
Identify and apply relevant tax rules and regulations to the problems.

Develop a Tax Planning Strategy for a Hypothetical Pass-Through Entity

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Apply your knowledge to design a comprehensive tax plan that optimizes tax outcomes for a pass-through entity.

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Identify relevant tax laws and regulations.
Analyze the specific characteristics and circumstances of the hypothetical entity.
Develop a range of potential tax planning strategies.
Evaluate the pros and cons of each strategy.
Create a written tax plan that outlines the recommended strategy and its implementation.

Career center

Learners who complete Taxation of Business Entities II: Pass-Through Entities will develop knowledge and skills that may be useful to these careers:

Tax Accountant

Tax accountants prepare, analyze, and examine financial records to ensure that an organization complies with local and federal tax laws and regulations. This course can help you succeed in this role by providing an understanding of the various tax laws and regulations that apply to pass-through entities, including partnerships and S corporations.

See salaries and explore the career path for Tax Accountant

Tax Associate

Tax associates perform a variety of tasks related to taxation, including preparing tax returns, providing tax advice, and representing clients before the IRS. This course can help you build a foundation in the taxation of pass-through entities, which can be a valuable asset in this role.

See salaries and explore the career path for Tax Associate

Tax Consultant

Tax consultants provide advice and guidance to individuals and businesses on tax matters. This course can help you gain a deeper understanding of the tax laws and regulations that apply to pass-through entities, which can be helpful in providing advice to clients.

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Tax Manager

Tax managers oversee the tax affairs of an organization. This course can help you gain the knowledge and skills needed to manage the tax function of an organization, including the taxation of pass-through entities.

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Tax Director

Tax directors are responsible for the overall tax strategy of an organization. This course can help you gain the knowledge and experience needed to lead the tax function of an organization and make strategic decisions related to the taxation of pass-through entities.

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Tax Auditor

Tax auditors examine financial records to ensure that taxpayers are complying with tax laws and regulations. This course can help you gain the knowledge and skills needed to audit the tax returns of pass-through entities.

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IRS Agent

IRS agents investigate tax fraud and enforce tax laws and regulations. This course can help you gain the knowledge and skills needed to investigate the tax returns of pass-through entities and identify potential fraud.

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Financial Advisor

Financial advisors provide advice and guidance to individuals and families on financial matters, including tax planning. This course can help you gain a better understanding of the tax laws and regulations that apply to pass-through entities, which can be helpful in providing advice to clients.

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Business Consultant

Business consultants provide advice and guidance to businesses on a variety of matters, including tax planning. This course can help you gain a better understanding of the tax laws and regulations that apply to pass-through entities, which can be helpful in providing advice to clients.

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Attorney

Attorneys provide legal advice and representation to individuals and businesses on a variety of matters, including tax matters. This course can help you gain a better understanding of the tax laws and regulations that apply to pass-through entities, which can be helpful in providing advice to clients.

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Accountant

Accountants prepare, analyze, and examine financial records to ensure that organizations are complying with local and federal laws and regulations. This course can help you gain a better understanding of the tax laws and regulations that apply to pass-through entities, which can be helpful in providing accounting services to clients.

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Bookkeeper

Bookkeepers maintain financial records for organizations. This course can help you gain a better understanding of the tax laws and regulations that apply to pass-through entities, which can be helpful in maintaining accurate financial records.

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Tax Preparer

Tax preparers prepare tax returns for individuals and businesses. This course can help you gain a better understanding of the tax laws and regulations that apply to pass-through entities, which can be helpful in preparing accurate tax returns.

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Payroll Clerk

Payroll clerks process payroll for employees. This course can help you gain a better understanding of the tax laws and regulations that apply to pass-through entities, which can be helpful in processing payroll accurately.

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Loan Officer

Loan officers help individuals and businesses obtain loans. This course may be useful in understanding the tax implications of different types of loans, including loans to pass-through entities.

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