Partnership Taxation: Form 1065, Basis, Allocations & Schedule K-1

Categories: Federal Tax, IRS CE
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About Course

This course provides tax professionals with a comprehensive understanding of partnership taxation under Subchapter K of the Internal Revenue Code. Participants will learn how partnerships are formed, how income and losses are allocated among partners, how partner basis is calculated and tracked, and how Schedule K-1 is prepared and reported.

The course addresses the most common areas of confusion and error encountered by tax preparers, including guaranteed payments, special allocations, capital account maintenance, and the correct reporting of K-1 items on individual returns.

Upon completion, participants will be equipped to accurately prepare Form 1065, analyze Schedule K-1 items, and advise clients on the tax implications of partnership transactions.



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What Will You Learn?

  • Understand Form 1065 filing requirements for partnerships and multi-member LLCs
  • Calculate partner outside basis and track basis adjustments
  • Distinguish inside basis, outside basis, and capital accounts
  • Apply partnership allocation rules under IRC §704(b)
  • Report guaranteed payments correctly
  • Read and report Schedule K-1 items accurately
  • Apply at-risk and passive activity loss limitations
  • Identify common partnership tax reporting errors

Course Content

Module 1 – Partnership Basics & Filing Requirements
Learn the fundamentals of partnership taxation, including entity classification, Form 1065 filing requirements, partnership agreements, tax year rules, and key partnership elections. This module provides the foundation for understanding how partnerships are reported for federal tax purposes.

  • Partnership Basics & Filing Requirements

Module 2 – Partner Basis & Capital Accounts
Examine the rules governing partner basis and capital account maintenance. This module explains inside and outside basis, basis adjustments, distributions, loss limitations, tax capital accounts, and the application of at-risk rules in partnership taxation.

Module 3 – Guaranteed Payments & Allocations
Review how partnership income, deductions, gains, and losses are allocated among partners. This module covers guaranteed payments, special allocations under IRC §704(b), substantial economic effect requirements, self-employment tax considerations, and reporting requirements.

Module 4 – Schedule K-1 Reporting & Common Errors
Learn how to interpret and report Schedule K-1 information accurately on individual tax returns. This module explains major K-1 reporting categories, passive activity rules, self-employment income reporting, and common errors encountered by tax preparers.

Final Assessment – Partnership Taxation: Form 1065, Basis, Allocations & Schedule K-1
This course provides tax professionals with a practical understanding of partnership taxation, including Form 1065 preparation, partner basis calculations, income allocations, guaranteed payments, and Schedule K-1 reporting requirements.

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