capital accounts 704 b minimum gain presented by brad elphick cpa novogradac company llp l.
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CAPITAL ACCOUNTS 704(b) & MINIMUM GAIN Presented by Brad Elphick, CPA, Novogradac & Company LLP PowerPoint Presentation
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CAPITAL ACCOUNTS 704(b) & MINIMUM GAIN Presented by Brad Elphick, CPA, Novogradac & Company LLP - PowerPoint PPT Presentation


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CAPITAL ACCOUNTS 704(b) & MINIMUM GAIN Presented by Brad Elphick, CPA, Novogradac & Company LLP. Increases to partner’s capital accounts Cash contributed Fair market value of property contributed Net of liabilities assumed by partnership Allocations of income or gain

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capital accounts 704 b minimum gain presented by brad elphick cpa novogradac company llp
CAPITAL ACCOUNTS704(b) &MINIMUM GAINPresented byBrad Elphick, CPA, Novogradac & Company LLP
capital accounts
Increases to partner’s capital accounts

Cash contributed

Fair market value of property contributed

Net of liabilities assumed by partnership

Allocations of income or gain

Decreases to partner’s capital accounts

Cash distributed

Fair market value of property distributed

Net of liabilities assumed by partnership

Allocations of loss or deduction, most credits

CAPITAL ACCOUNTS
slide3

Partnership Agreement

TAX CREDITS

$

$

$

Developer

Investor

Limited Partnership

Capital Account

CREDITS

LOSSES

slide4

Developer

Investor

Limited Partnership

Capital Account

CREDITS

LOSSES

slide5

704(b) Issues

$

Developer

Investor

Limited Partnership

Does not receive credits or losses

Cannot use credits or losses

Must pay an adjuster to the Investor

Capital Account

CREDITS

LOSSES

704(b)!!!

minimum gain
What is it?

Assumed sale of asset at year end

Assumed sale price of non-recourse debt plus $1

Gain is calculated

Assumed Sale price less Net Book Value

How does it help a 704(b) problem?

Assumed Minimum Gain is allocated to partners

Losses can continue to flow to partners with negative capital accounts

Credits flow to the investor partner

Minimum Gain
slide10

Questions???

Find FREE tax credit resources at:

www.taxcredithousing.com

E-mail us at

Dan.smith@novoco.com