Understanding Partnership Taxation: PTE Elections, 754 Elections, and Selling a Partnership Interest

Overview

Partnership tax law is always difficult. However, when certain transactions come up, not knowing how to handle them can be costly to clients and practitioners. In this course, we discuss several of these types of situations. We will explore the tax impacts of a PTE election and how a 754 election affects the inside basis of partnership assets. We will then examine those tricky look-through provisions on the sale of a partnership interest in order to properly calculate the tax implications.

Learning Objectives:

• Identify when a PTE is able to deduct state taxes it pays at the entity level.
• Recognize the tax implications of hot assets in the sale of a partnership interest.
• State the character of a gain on the sale of a partnership interest.