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AIM 6354-OG1

Partnership Tax The University of Texas at Dallas
Spring 2005
(12/08/2004 )

Lecturer: Office: Phone: Email: Website:

Ronald J. Blair, CPA, MBA SOM 4.227 Hours: M-F, 11:00 - 4:00 972-883-4430 Fax: 972-883-6811 rblair@utdallas.edu http://utdallas.edu/~rblair/

Text: Lind, Schwarz, Lathrope, and Rosenberg, Fundamentals of Partnership Taxation, Sixth Edition, Foundation Press, 2002 (ISBN 1-58778-221-9) 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 Off-Campus 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, 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 exam problems as they will be very similar. Students are encouraged to print a copy of each IRC section in Subchapter K for reference throughout the semester.

Technical Requirements
In addition to a confident level of computer and Internet literacy, certain minimum technical requirement must be met to enable a successful learning experience. Technical requirements include but not limited to: Hardware
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A Pentium processor or equivalent Mac system; Windows 98/Me/2000/XP or Mac OS 9.x or OS X 10.1. Internet access with modem or preferably with other faster connections. 32 MB system Ram; 200 MB free disk space or sufficient storage Sound card CD-ROM capabilities

Software
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Netscape Navigator 4.7x or higher (but 4.78, 4.79 and 6.0-6.1 not supported), or Internet Explorer 5.0 to 6.0 (but 5.5 SP1 not supported). See browser configuration info below. MS Office 97/98 is the minimum standard. (Microsoft software is available at a nominal cost from UTD Microsoft Program. For more information, visit Global MBA Online Student Service web page at:

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http://som.utdallas.edu/globalmba/gmba_online_services.htm). Virus detection/protection software such as McAfee “Plug-ins” tools such as current version of RealPlayer/RealOne Player (available at: http://www.real.com/realone/index.html) and Adobe Acrobat Reader (available at: http://www.adobe.com/products/acrobat/readstep2.html) A zip file expansion tool such as WinZip or Stuffit Expander (available at: http://www.download.com).

Web Browser Configuration For the WebCT courses to work properly, you need one of the WebCT supported browsers listed above with JavaScript enabled and cookie enabled. It is also important that you set the cache settings of your browser to verify web documents “Every Time”. The methods for configuring these settings vary among browsers. Please follow this web link provided by WebCT to tune-up your browser:http://www.webct.com/tuneup/.

Course Access and Navigation
This course is developed using a web course tool called WebCT. It is to be delivered entirely online. You will be notified by email about the course access information at the start of the course. You’ll need to have a UTD NetID and password (your UTD Unix/Email ID and password) to access the course. If you have not used a UTD NetID account yet, you can go to http://netid.utdallas.edu/ to initiate your account shortly before or at the start of the semester. Your UTD NetID is your WebCT ID to be used to log on to the UTD WebCT courses. For more information, please check out this NetID FAQs page. The URL for the course login page is: http://webct.utdallas.edu/ . You can login to the course whenever you want. You are required to meet any deadlines for the assignments and exams and also any schedules for class activities or tasks the course requires. You should login to the course site regularly to check course updates, discussion board messages and so on.

You’ll access “My WebCT” page after you login. The page listed all the courses you’ve registered. You can click the course title to access the course Home page which displays several icon links. Clicking each icon link will take you to different subsidiary pages containing the course content elements or built-in course tools. Some navigation components such as the Navigation Bar with Course Menu on the left side, the Menu Bar and the path link on the top and the Action Menu on the content page can help you navigate within the course site. To get started with a WebCT course, please see Getting started: Student WebCT Orientation. For more information about WebCT tool usage, please see the WebCT ’s Student Help Index. Within the course site, you can always click HELP on the WebCT Menu Bar to find information and answers. You can also check out the Orientation Center to Online Learning and WebCT provided on WebCT’s web site. For more WebCT information and its learning resources, visit http://www.webct.com. If you have any problem with your UTD account or connection to the UTD WebCT server, you may email : assist@utdallas.edu or call UTD computer help call center at: 972-883-2911. If you encounter any technical difficulties with the course, you can send an email to gmbasupport@utdallas.edu.

Communications
WebCT built-in communication tools: There are four built-in communication tools to facilitate learning, communication and collaboration. A course conferencing system, the Discussion, allows the communications among all course participants. Discussion topics or groups can be set up for topic discussions and homework assignments. You can use course Mail tool to communicate privately with instructor and classmates. The Chat tool can be used for real time communication among course participates. Please see specific information for accessing Chat tool: http://som.utdallas.edu/training/chat.htm. Finally there is a Whiteboard tool also allows real-time interaction among course participants using a graphical interface. Small groups may use Chat for group discussions. Interaction with Instructor: Instructor will communicate with students mainly using course Discussion board. Students may send personal concerns or questions to the instructor using course Email tool. Instructor will reply to student emails or Discussion board messages within 3 working days under normal circumstances.

Grading Information:

Grading:

Two exams – 40 points each Final exam Partnership return Periodic quizzes/exercises Total points

80 50 40 30 200

You can check your grades by accessing “My Grade” icon on Student Tools page after the grade for each assessment task is released. Exams Two Online Exams and a Final are open book, generally problems, rules, and concepts similar to the text problems assigned, but answered in a multiple choice format. You can access online exams by clicking the Online Exams icon and then clicking the available quiz title links. Each exam is timed and can only be accessed once within the scheduled time window. Please read the on-screen instructions carefully before you click the Begin Quiz button. After each exam/quiz is graded and released for reviewing, you may go back to the exams/quizzes page and click the “View scores” button of the quiz to review your results and any feedbacks from the instructor. Proctored Final Exam Information This course requires a proctored final examination. An on-campus class exam session is scheduled on Friday, April 29, under the supervision of the instructor. Room info will be announced later on Discussion board. Students who are not able to attend this exam session with instructor can arrange an individually proctored exam with a testing service of their choice at any date within this required exam time April 26 – May 2, 2005. For local students, testing service is available at UTD Learning Resources Center. Students who find UTD geographically inconvenient may use a testing service at a convenient location to have the exam proctored. All individually arranged proctored exams must be completed within the required exam time window. Student who will use either UTD testing service at Learning Resources Center or an outside testing service, please inform the instructor and the Global MBA Online office (gmbasupport@utdallas.edu) and complete a proctored exam form and send back to GMBA Office not later than May 2, 2005. For more information on arranging a proctored exam, the detailed procedures and a downloadable exam form, please go to the Proctored Exam Information page at: http://som.utdallas.edu/globalmba/gmba_proc_exam_info.htm. All completed exams must be received by May 2, 2005, to allow timely grade reporting to UTD Registrar. 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.

Course Evaluation
As required by UTD academic regulations, every student needs to do an evaluation for each enrolled course at the end of the semester. An online instructional assessment form will be made available for your confidential use. Please look for the course evaluation link on the course Homepage towards the finishing of the course. Your feedback and comments are greatly appreciated

Course schedule
Wk Date LSL&R Chapter
Partnership Tax in Brief

IRC §§

Treas. Regs. §§

1

J10

1 Overview of Taxation of Partnerships and Partners Problems: p. 15

§761; §7701

2

J18

Building a Partnership 2 Formation of a Partnership §§721 - 723; §704; §724 Problems: p. 33, p. 40, p. 43, p. 47, p. 56, p. 70, p.72 Rules of Partnership Operations - In General 3 Operations of a Partnership: §§701 - 703; §704(d); §1.701 -1; §1.702 -1(b); General Rules §§705 -706 §1.703-1(a); §1.704 -1(d) Problem: p. 93; p. 96; p. 100; #1, p. 108; #1, p. 116 Partnership Operations - Allocations 4 Partnership Allocations A Introduction B Special Allocations Under §704(b) Section 704(b) Exam I Chapters 1 - 3 Allocations (cont'd) 4 Partnership Allocations (cont'd) B Special Allocations Under Section 704(b) (cont’d) Problems: ##1 and 2, p. 155; and p. 167 C Allocations with Respect §704(a) and (c) to Contributed Property Problem: ##1 and 2, p. 189

3

J24

4

J31

5

F7

§1.701-3(a); §1.704-1(b)(1) and (2)

6

F14

Allocations (cont'd) 4 Partnership Allocations (cont'd) D Allocation of Partnership §704(c)(1)(A); §1.752 -1; §752-2(a)-(c) Liabilities §752(a )and (c) Problem: #1, p 207 E Allocations Where Partners' §706(c )(2)(B) and (d) §1.706-1(c)(4) Interests Vary During the Year Problem: #2, p. 214 F The Family Partnership Rules §704(e) §1.704-1(e)(1) Problems: p. 219 and (3)(i)(b) The Anti-Abuse Regs. - §1.701-2 10 The Partnership Anti-Abuse Regs §1.701-2(a) - (c); Problem: p. 391 §1.701-2(e), (h) & (i) Partner / Partnership Transactions 5 Transactions Between §707(a)(1) and (c ); §1.707-1(a) and (c); Partners and Partnerships §267(a)(1) - (d); §1.707 -3(a) - (d) §453(g) Problems: p. 228; #1, p. 234;#1 and #2, p. 242; #1 and #2, p. 248 Exam II Chapters 4, 5 and 10

7

F21

8

F28

9

M7

Spring Break Partnership Return Partnership Form 1065 Form 1065 Software (Partnership return due April 11)

10 M14

(Friday, March 25 is graduate students’ last day to withdraw from a course with an automatic "W") Partnership Interest Dispositions 6 Sales and Exchanges of §705(a); §706(c); Partnership Interests §§741, 742,743;

11 M21

§1.7061(c)(1) - (5); §1.743-1(a) - (e);

§751(a) - (f); §752(a); §1.751-1(a) and (c); §§754, 755 §1.754-1; §1.755-1(a) Problems: #1, p. 266; p. 268, p. 273; and #1, 281 12 M28 Distributions - Operating 7 Operating Distributions (Except E) §§731, 732(a) - (d), §1.731-1(a)(1) and (3); 733, 735; §751(a) - (d); §1.732-1(a) - (d); §1245 §1.733-1; §1.735 -1; §1.1245-4(f)(2)&(3) Problems: ##1 and 2, p. 294; #1, p. 297; p. 303, and p. 308

13 A 4

Liquidations / Terminations 8 Liquidating Distributions and Terminations -

§708(b)(1); §§731, §1.731 -1(a)(2); 732; §735, §751 §1.732-2(b); §1.736 -1(b)(4) Problems: p. 325; #1, p. 338; p. 348, p. 354, p. 359; and #1, p. 370

14 A11

Death of a Partner 9 Consequences of Partner's Death Problems: p. 385 and #2, p. 387 Partnership Return Due

§694; §706(c); §708(b); §§753; 1014(a) & (c); §2033

§1.742-1; §1.753-1(a)

15 A18

S Corporations 11 S Corporations and Their Shareholders

§311(b); §§1361, 1362, 1363; §§1366(a) - (e), 1367, 1368; §§1371, 1372; §§1374, 1375; §1378 Problems: (a) thru (e), pp 403-404; (a) thru (e), pp 409-410; ##1 and 2, pp. 432-433; ##1 and 3, pp. 436-437; #1, p. 443; and #1, p. 449

16 A25 17 A29

Review of Partnership Return Final Exam Comprehensive, w/ emphasis on chapters 6 – 11