This update on recent developments in taxation relating to S corporations includes cases and rulings on eligible shareholders, electing small business trusts, inadvertent S election terminations, and other issues, as well as changes made by the TCJA.
Failure to properly complete all required fields on Form 8283, including the donor’s cost or other basis, could jeopardize the entire deduction with respect to the donated property.
A taxpayer’s conservation easement deductions were denied because the easements allowed for changes in the use of the property.
The IRS issued final regulations on the centralized partnership audit regime, which generally assesses tax at the partnership level.
This article reviews and analyzes recent rulings and decisions involving partnerships and discusses developments in partnership formation, debt and income allocations, distributions, and basis adjustments.
The IRS concluded that a taxpayer was not permitted to aggregate the S corporations with the partnership for the purpose of applying the at-risk rules of Sec. 465.
With the repeal of technical terminations, partnerships can only terminate for U.S. federal income tax purposes if no part of any business, financial operation, or venture continues to be conducted by any of its partners.
If the partnership agreement’s tax allocations do not have substantial economic effect, or if the partnership agreement is silent concerning tax allocations, the tax allocation must be made in accordance with the partners’ interests in the partnership.
This item discusses issues partnerships and their advisers should consider when designating a PR or DI, accounting for the potential for conflicts of interest, whether and to what extent limitations can be placed on the PR or DI, and how these roles differ dramatically from that of the TMP.
Economic benefits from an S corporation’s payment of a premium on a life insurance policy were not includible in the shareholder/employee’s income.
The passthrough of S corporation losses to the extent of the shareholder’s basis in his or her stock and debt can be beneficial, but the resulting reduced basis debt may lead to taxable income on repayment of the debt.
This article discusses who qualifies to take the credit, how to make the election, the calculation and allocation of the credit, and how to report it.
A taxpayer’s amended returns sufficiently apprised the IRS of inconsistencies between the amended returns and the returns filed by the bankruptcy trustee of his wholly owned S corporation.
This item discusses the many tax ramifications of converting.
A terminated S corporation may remain a cash-basis taxpayer if its average gross receipts for the three previous tax periods are less than $25 million.
Many factors must be considered when electing S status for a new corporation or converting an existing C corporation to ensure a timely election.
Broad state adoption of the model statute developed by the AICPA in partnership with other major stakeholders will provide greater uniformity and increased compliance.
Regulations explicitly require elections to be made by the corporation, and shareholders themselves cannot change these elections.
Because facade easements must be protected in perpetuity, a leaseholder was not allowed to claim a deduction for contributing an easement to a not-for- profit preservation corporation.
Disguised sale occurs when a partner(s) engages in a transaction that, when viewed together with a partnership, involve property and are characterized as the sale or exchange of property.