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AIM 6354-501

Partnership Tax The University of Texas at Dallas
Spring 2006

Lecturer: Office: Phone: Email: Website: TA:

Ronald J. Blair, CPA, MBA SOM 4.227 972-883-4430 Jaya 972-883-6498

TTh 9:00 – 4:00 WF 11:00 – 3:00

Text: Lind, Schwarz, Lathrope, and Rosenberg, Fundamentals of Partnership Taxation, Seventh Edition, Foundation Press, 2005 (ISBN 1-58778-832-2) Discussion slides are based generally on the text. Other references include McKee, Nelson & Whitmire, Federal Taxation of Partnerships and Partners, Third Edition, Warren, Gorham & Lamont In the frequent quotation of statute in the classnotes (slides), emphases of certain words and phrases are added by the lecturer. Textbooks and some other bookstore materials can be ordered online through MBS Direct Virtual Bookstore. They are also available in UTD Bookstore and OffCampus Books.

Course Objective
The course will include an analysis of the IRC, Treasury Regulations, and other authorities relating to the fundamentals of taxation of partnerships. Its purpose is to give the student knowledge of the tax implications of this organizational form of business operation - the effect, the advantages and disadvantages, and the pitfalls, as well as the responsibilities that go with it. It will also give the student an introduction to the partnership return and its purpose. Students should read the assigned chapters, IRC sections, Regs, and prepare the weekly assigned problems. Students are strongly urged to work the problems as assigned before solutions are accessed. This will enable you more quickly grasp the concepts involved as you compare your solutions to the posted solution, and will prepare you for the test problems as they will be very similar in content. Students are encouraged to print a copy of each IRC section in Subchapter K for reference throughout the semester.

E-Mail: Use WebCT to communicate with the instructor or TA. This is a closed system and only the person to whom the message is address is allowed access. Students may address messages to the instructor or TA privately. Or messages may be addressed to include all other students, such as to raise a question that might be of interest to everyone; responses will be made accordingly. Discussion: The Discussion feature can be used to post messages to other members of the class. This is an open system and all class members can access postings on it. The instructor and TAs do not normally respond to this feature. Personal messages should be sent by email and not posted on the discussion board.

Grading Information:
Grading: Two tests – 20 points each Final exam Partnership return Class participation, periodic quizzes/exercises Total points 40 25 25 10 100

Exams Two tests and a final are open book, consisting generally of problems, rules, and concepts similar to the text problems assigned, but answered in a multiple choice format. Translation of the total point score into a letter grade will be based on the instructor’s judgment. The letter grade will reflect each student's performance relative to the course and standards expected of graduate students at the University of Texas at Dallas.

Scholastic Dishonesty
The University has policies and discipline procedures regarding scholastic dishonesty. Detailed information is available on Scholastic Dishonesty web page. All students are expected to maintain a high level of responsibility with respect to academic honesty. Students who violate University rules on scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from the University. Since such dishonesty harms the individual, all students and the integrity of the University, policies on scholastic dishonesty will be strictly enforced.

NOTE: You MUST have a password and login ID from UTD’s Information Resources Department in order to access databases and electronic journals. Allow at least 24 hours to activate your computer account.

Course Schedule
Wk Date Sp'06 OG1 Topic IRC §§ Regs §§






Partnership Tax in Brief J10/12 Chapter 1 §§701, 7701 Overview of Taxation of Partnerships and Partners Problems: pp. 15, 16 Assembling a Partnership J17/19 Chapter 2 §§721 - 723, 704, 724 Formation of a Partnership Problems: pp. 36, 43, 46, 50 and 51, 59, 73, 74 and 75 Rules of Partnership Operations - In General J24/26 Chapter 3 §§701-703, 704(d), §§1.701-1, 1.702-1(b), 705-706 1.703-1(a), 1.704-1(d) Operations of a Partnership - General Rules Problems: pp. 97, 100, 104, p. 107 #1 and p. 114 #1 Partnership Operations - Allocations J31 Chapter 4, A Introduction B Special Allocations Under §704(b) §704(b) F2 Test 1 Chapters 1 - 3 Allocations (cont'd) F 7/9 Chapter 4, B (cont'd) Problems: p. 154 ##1 and 2; p. 165 C Allocations with Respect to Contributed Property §704(a) and (c) §§1.701-3(a), 1.704-1(b)(1) Problems: p. 188 ##1 and 2 and (2) D Allocation of Partnership Liabilities §§704(c)(1)(A), §§1.752-1, 1.752-2(a) - (c) 752(a) and (c) Problems: p. 207 #1








9 10

M7 M14/16

Allocations (cont'd) Chapter 4, E Allocations Where Partners Interests Vary During the Year §703 (c)(2)(B) and (d) §1.706-1(c)(4) Problem: p. 213 #2 F The Family Partnership Rules §704(e) §704-1(e)(1) and (3)(i)(b) Problems: p. 218 and 219 The Anti-Abuse Regs. - §1.701-2 Chapter 10 §§1.701-2(a) - (c), The Partnership Anti-Abuse Regs 1.702-2(e), (h) and (I) Problem: p. 400 Partner / Partnership Transactions Chapter 5 §§707(a)(1) and (c), §§1.707-1(a) and (c), 267(a)(1) - (d), 453(g) 1.707-3(a) - (d) Transactions Between Partners and Partnerships Problems: pp. 227 and 228; p. 233 #1; p.241 ##1 and 2; p. 247 ##1 and 2 Partnership Return Form 1065 Form 1065 Form 1065 Software Assign partnership practice return - due March 21 Partnership return project - due April 4 Test II Chapters 4, 5 and 10 Spring Break Partnership Interest Dispositions Chapter 6 §§705(a), 706(c ), 741, §§1.7061(c)(1) - (5), 742, 743, 751(a) - (f) 1.743-1(a) - (e), 752(a), 754, 755 1.751-1(a) and (c), 1.754-1, 1.755-1(a) Sales and Exchanges of Partnership Interests Problems: p. 265 #1, p. 267, p. 272, and p. 281 #1



Distributions - Operating Chapter 7 §§731, 732(a) - (d), 733, 735, 751(a) - (d), (Except E) §1245

§§1.731-1(a)(1) and (3), 1.732-1(a) - (d), 1.733-1, 1.735-1, 17.735-1, 1.1245-4(f)(2)(3)





A6 14 A11/13





Operating Distributions Problems: p. 294 ##1 and 2; p.297 #1, p. 303, and p. 308 Liquidations / Terminations Chapter 8 §§708(b)(1), 731, 732, §§1.731-1(a)(2), 1.731-2(b), 735, 751 1.731-1(b)(4) Liquidating Distributions and Terminations Problems: p. 326, p. 339 #1, p. 348, p 354, p. 360, p. 378 #1 Death of a Partner Chapter 9 §§694, 706(c ), 708(b), §§1.742-1, 1.753-1(a) 753, 1014(a) and (c ), §2033 Consequences of Partner's Death Problems: p. 393, p. 394 #2 Partnership return project due - Discuss S Corporations Chapter 11 §§311(b), 1361, 1362, 1363, 1366(a) - (e), 1367, 1368, 1371, 1372, 1374, 1375, and 1378 S Corporations and Their Shareholders Problems: pp. 412, 417, p. 431 #1, p. 435 #1 and 441 #1 S Corporations (cont'd) Chapter 11 (cont'd) Form 1065 Review of Partnership Return Final Exam Emphasis on Chs. 6 - 9 and 11

Syllabus Addendum
Each student in this course is expected to exercise independent scholarly thought, expression and aptitude. This addendum to the course syllabus is provided to assist you in developing and maintaining academic integrity while seeking scholastic success. General Comments:
• • • • • • All academic exercises (including assignments, essays, laboratory experiments and reports, examinations, etc.) require individual, independent work. Any exception(s) will be clearly identified. Be sure your name or identifying number is on your paper. Complete and turn in academic exercises on time and in the required format (hardcopy, electronic, etc.). Retain confirmation of document delivery if submitted electronically. Retain all research notes and drafts until the project or assignment has been graded. Obtain written authorization from your instructor prior to submitting a portion of academic work previously submitted for any academic exercise. (This includes an individual or group project submitted for another course or at another school.)

Essays and Significant Papers:
Be prepared • To present periodic drafts of work in process • To correctly and completely reference all sources of information using the citation format prescribed • To turn your completed assignment in timely and in the prescribed manner (electronic, hardcopy, etc.)

Be prepared • To leave all personal belonging at the front of the room or other designated location (this includes cell phones, turned off of course, and beverage containers) • To present your UTD Comet Card • To remove your cap or hat • To remove the batteries from any electronic device (e.g. calculator) • To exchange blue books or bring them early as required • To change seating • To sign out when exiting the testing room • To be escorted for lavatory use

All episodes of suspected scholastic dishonesty will be reported according to University policy. Students who violate University rules on scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from the University. Since such dishonesty harms the individual, all students and the University, policies on scholastic dishonesty will be strictly enforced. Penalties that may be assessed for scholastic dishonesty may be reviewed in Subchapter D. Penalties at