TAX 9863 Lecture Notes - Lecture 41: Tax Shelter, Taxable Income, Basis Of Accounting
Document Summary
Section 448: (c corp prohibited from using cash method) pships w/ c corps as partners are too. Does not apply to pships (other than tax shelters) for any year unless avg annual gross receipts of the pship for prior 3 years exceeds million. If a pship comes w/i definition of a tax shelter in s461(i)(3) it too must use the accrual method of accounting, no matter size. Tax shelter definition encompassess not only traditional tax shelters but also publicly offered pships. S703(a) denies two types of deduction designed for individuals: Deduction for personal exemption and the additional itemized deductions. Benefits which are directly passed through to the partners in their individual capacities. These are deductions for certain taxes, charitable contributions, net operating losses and depletion of oil and gas well. Partner"s outside basis includes her contributions to the pship (s722) and is reduced by distributions from the partnership (s733)
