Partnerships and LLCs: Tax Practice and Analysis (2nd Edition), revised by Robert Ricketts and Larry Tunnell, discusses the complex issues involving partnership taxation with utmost clarity. It uses hundreds of illustrative examples, practice observations, helpful charts and insightful explanations to make even the most difficult concepts understandable. The book reflects the authors' penchant for communicating the pertinent facts in very direct language and creating a context for understanding the multifaceted issues and applying them to practice.
This new edition fully reflects all the latest developments in this complex area, including important changes in 2004 American Jobs and Working Families Tax Acts. These include changes affecting:
- partnership basis adjustments
- transfers to partnerships of property with built-in losses
- sale of an interest in a partnership with built-in loss property
- disproportionate distributions from partnerships with built-in loss property
- expensing and amortization of partnership organizational expenses
- partnership treatment of the deduction for domestic production activities
- recognition of cancellation-of-indebtedness income, and more
In six parts, Partnerships and LLCs: Tax Practice and Analysis covers the critical aspects of this complicated area, with individual parts focusing on partnership characteristics, funding, taxation of operations, partner's share of partnership debt, disposition of partnership interest, and distributions. From choice-of-entity considerations to sales and liquidations, the entire breadth of partnership and LLC taxation is covered. Special attention is given throughout to the complex inter-workings of rules that bind, tax and control these entity operations.
In the book's first part focused on preliminary considerations, the basic underpinnings are presented covering key areas such as the "check the box" rules, "anti-abuse" rules, investment joint venture rules, the application of partnership taxation to LLCs, liability issues, passive loss limitations, audit issues, self-employment taxes, IRS classification, tax year and accounting method selection, and much more.
The second part of Partnerships and LLCs: Tax Practice and Analysis looks at property contributions and disguised sales, transactions between partner and partnership, and formation and start-up expenses. A special summary table for the tax treatment of pre-opening expenses is included.
Next, the central core of the book explains the taxation of operations including partnership income rules, the pass-through concept, and the partner's share of income and debt. Specific rules, reporting and compliance issues are thoroughly addressed. Form 1065 and schedules L, M-1, M-2, K and K-1 are also explained.
Part four covers partner's share of partnership debt, while disposition of a partnership interest is the subject of the fifth part of Partnerships and LLCs: Tax Practice and Analysis. This section covers the amount and character of the seller's gain or loss, sales of partnership interest when the partnership holds ordinary income property and the effect of sale of partnership interest on the partnership. The final part covers distributions, including nonliquidating, liquidating, special distribution exceptions, and disproportionate distributions. This section also includes coverage of the death or retirement of a general partner and special rules for service partnerships.
The detailed and substantial coverage in the text is enhanced by the abundant illustrations and special aids to understanding, such as flowcharts, offered throughout. Partnerships and LLCs: Tax Practice and Analysis should find a welcome place with all tax practitioners.
Author of the First Edition, Thomas G. Manolakas passed away in June 2004. He was a visiting tax professor at a number of universities, including USC and Hastings School of Law. He was the author of several books on taxation and is widely regarded for his expertise in the broad spectrum of federal taxation.
The Second Edition of the book has been revised by Robert Ricketts and P. Larry Tunnell, who will assume full authorship of the text in future editions. Robert Ricketts is the Frank M. Burke, Chair of Taxation and the Director of Accounting Programs at the Rawls College of Business at Texas Tech University. Larry Tunnell is an Associate Professor of Accounting at New Mexico State University in the College of Business Administration and Economics.
