This course is the second in a 2-part series that covers tax issues that can affect investment partnerships and their partners. Investment partnerships have become increasingly prevalent. They are now widely used for real estate development and management, private equity, hedge, venture capital and credit fund vehicles, and wealth management arrangements. The partnership structure (including LLCs treated as partnerships for tax purposes) offers the advantages of flow-through taxation and economic flexibility, but with those benefits come complexity and sometimes unanticipated tax results.

The 2-part series broadly explores a myriad of issues that affect investment partnerships and their partners. This course (the second part of the series) starts out with a brief recap of some of the high points for the first course, and then builds on those concepts. It explores approaches for compensating sponsors and managers, focusing on the tax implications of using profit interests (including case law, the IRS Revenue Procedure 93-27 “safe harbor”, and the 2017 Tax Act increased holding period for long-term capital gains associated with “carried interests”). It identifies issues that can arise in connection with transfers of partnership interests, and considerations concerning winding up and liquidating. Finally, it explains the 2015 Balanced Budget Act’s overhaul of the partnership tax audit rules.

While accountants and other tax professionals will find the technical aspects of this course helpful in understanding investment partnerships, practical aspects of the course will also be valuable to investment and real estate professionals, finance and accounting executives, wealth managers, and investors (and those considering becoming investors) in investment partnerships.

Part I of this course can be found here.

Course Key Concepts: Partnership, Limited Liability Company, Partnership Agreement, Carried Interest, Fee Waiver, Section 751 Asset, Section 754 Election, Capital Account Book-Up, Bipartisan Budget Act (BBA) Audit Regime, Partnership Representative, “Push-out” Election.

Learning Objectives
  • Explore arrangements for compensating partnership sponsors and managers.
  • Recognize issues presented by compensation with profits interests.
  • Identify tax implications of partnership interest transfers.
  • Recognize tax implications of partnership liquidations.
  • Discover important features of the new partnership tax audit regime, introduced by the Balanced Budget Act of 2015.
Last updated/reviewed: August 5, 2023
4 Reviews (21 ratings)

Reviews

3
Anonymous Author
I would not recommend this course if you're not a tax specialist already familiar with this topic andexpecting to deal with this situation in the near future. The instructor moves very quickly through the material, and slides are bullets without a lot of description. The test questions are very detailed. I managed to pass the test on the first try but did some google research for additional information. I learned something but don't have the understanding that I'd hoped I would.

3
Anonymous Author
Missed the human element in the course. Felt like a computer reading a long script very fast disregarding the importance of the material.

4
Anonymous Author
Again, very serious dive into partnership taxation. Not sure it was to be "The Basics"

4
Member's Profile
the questions in the final exam are too hard!!!!!!!!!!!

Prerequisites
Course Complexity: Foundational

No advanced preparation or prerequisites are required for this course, although completion of the first course in this series, Investment Partnerships: The Basics, Part I, is recommended.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Investment Partnerships: The Basics - Part 21:01
  Part 1 Review7:07
  Compensating The Manager/Sponsor9:32
  Compensating The Manager/Sponsor Cont'd7:08
  Partnership Interest Transfers9:41
  Partnership Interest Transfers Cont'd8:16
  Partnership Liquidations3:43
  Partnership Audits and Conlusion11:24
CONTINUOUS PLAY
  Investment Partnerships: The Basics - Part II57:52
SUPPORTING MATERIAL
  Slides: Investment Partnerships: The Basics, Part IIPDF
  Investment Partnerships: The Basics, Part II Glossary/ IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam