Date: July 31st , 2026

Time: 11am ET | 10am CT | 9am MT | 8am PT

Duration: 390 Minutes

Description:

This comprehensive, case‑driven training is designed to quickly build a practical, working understanding of basis calculations and distribution planning for owners of pass‑through entities, including S corporations, partnerships, and LLCs. Rather than treating basis as a purely theoretical concept, the course walks participants through realistic scenarios where basis determines how much loss can be deducted, whether distributions are taxable, and how much gain or loss is recognized when an interest is sold or redeemed.

A central focus of the course is line‑by‑line analysis of Schedule K‑1 reporting from both S corporations (Form 1120S) and partnerships (Form 1065). Participants will see how each K‑1 item—income, deductions, credits, distributions, and changes in liabilities affects an owner’s stock/debt basis for S shareholders and outside basis for partners and members, and how those amounts ultimately appear (or are limited) on the individual Form 1040. The course also integrates Form 7203, showing when it is required, how it replaces older basis worksheets, and how to use it to document stock and debt basis and loss limitations for S corporation shareholders.

The program uses a hands‑on, example‑driven approach. Through detailed case studies, attendees will:

• Build and update basis schedules for S corporation shareholders and partners/members across multiple years.

• Apply the ordered sequence of limitations—basis, at‑risk, passive activity, and excess business loss—to common loss scenarios, seeing exactly where and why losses are suspended and how they carry forward.irs+2

• Analyze how cash and non‑cash distributions affect basis, when distributions trigger taxable gain, and how recourse vs. nonrecourse debt changes both basis and at‑risk computations

Learning Objectives:

• List the three primary reasons basis must be calculated and tracked for S corporation shareholders and partners/members in partnerships and LLCs, including loss limitation, distribution planning, and gain/loss recognition on disposition.
• Calculate stock and debt basis for S corporation shareholders using current IRS guidance and Form 7203, S Corporation Shareholder Stock and Debt Basis Limitations.
• Calculate outside basis for partners and LLC members, incorporating contributions, income, distributions, and recourse/nonrecourse liabilities.
• Determine the amount of losses allowed from at‑risk activities under IRC §465 and distinguish at‑risk limits from basis and passive loss limitations.
• Review Form 1120S and Form 1065 Schedule K‑1s line by line to understand how income, deductions, credits, and liability information affect basis calculations and how those items flow to the individual owner’s Form 1040.

Topics Covered:

• New legislation and IRS guidance affecting basis computations and distributions, including changes to Schedule K‑1 reporting and the use of Form 7203 for S shareholder stock and debt basis limitations.
• Line‑by‑line analysis of Schedule K‑1 items to determine their impact on S shareholder stock and debt basis and partner/member outside basis, and how those items are reported on the owner’s Federal individual income tax return.
• The three major loss and deduction limitations on the individual return—basis, at‑risk, and passive/excess loss limitations and how they interact in practice.
• How cash and non‑cash distributions affect basis calculations, when distributions are tax‑free, and when they produce taxable gain to the owner.
• Comparative tax treatment of selling S corporation stock versus selling a partnership interest, including how basis and inside vs. outside gain/loss differences affect planning.
• What constitutes debt basis for S corporation shareholders under current regulations, including formal notes vs. open‑account debt, and the tax consequences of loan repayments and restructurings.
• How recourse and nonrecourse debt affect a partner’s or member’s basis and amount at‑risk, and how liability allocations reported on the K‑1 drive deductible losses and tax‑free distributions.

Credits and Other information:

• Recommended CPE credit – 7.0
• Recommended field of study – Taxes
• Session Prerequisites and preparation: None
• Session learning level: Basic
• Location: Virtual/Online
• Delivery method: Group Internet Based
• Attendance Requirement:  Yes
• Session Duration: 390 minutes

Who Will Benefit:

• CPA
• Enrolled Agents (EAs)
• Tax Professionals
• Attorneys
• Other Tax Preparers
• Finance professionals
• Financial planners

About Our Speaker :

J. Patrick Garverick , CPA (US), CFP®

J. Patrick “Pat” Garverick is a Certified Public Accountant based in the Phoenix, Arizona area and one of the most respected tax and financial education instructors in the profession. He began his career in public accounting in 1988 after earning his Bachelor of Science in Business Administration (BSBA) in Accounting from The Ohio State University. In 1992, he completed his Master of Taxation (MT) degree at Arizona State University and shortly thereafter launched his own tax and financial planning practice, combining deep technical expertise with day-to-day client advisory work.mncpa+3

In addition to being a CPA, Pat is also a Certified Financial Planner (CFP®), a combination of credentials that allows him to bridge tax, retirement, and broader financial planning issues seamlessly in both his client work and his teaching. Since the early 1990s, he has been writing, reviewing, and delivering tax and financial planning continuing professional education courses across the country, with a particular focus on practical, case-driven programs that help practitioners apply complex rules to real-world returns and planning scenarios