1. Topics

S Corporation, Partnership & LLC Taxation

The Partnership “Technical Termination” Trap

A sale or exchange of 50% or more of the total interest in a partnership’s capital and profits within a 12-month period causes the tax year of the partnership to close.

Timing a Loss Deduction

When a real estate venture is structured so that one partner provides the capital and the second provides operational experience, how are losses incurred by the capital partner treated?

Inadvertent S Corp. Terminations

When an S election is made, requirements must be met to avoid an inadvertent termination of S status.

Planning for Redemptions of S Corporation Stock Using Contingent Payments

When shareholders of an S corporation choose to part ways, they often do so by redeeming a departing shareholder’s stock.

How Changes in Corporate Tax Rate Can Affect Choice of C vs. S Corp.

This item examines the effect of the proposed lower corporate tax rates in an analysis of the tax results of converting an S corporation to a C corporation.

Current Developments in S Corporations

During the period of this S corporation tax update, some major changes that directly affect S corporations took place. This article also presents tax planning ideas for S corporations and their shareholders.

Santa Clara Valley Housing Group: An S Corporation Abusive Tax Shelter

Consideration of tax shelter case about whether warrants issued by an S corporation are a prohibited second class of stock reveals that the entire tax shelter is an arrangement that is a second class of stock.

S Corporation Shareholder Basis From Bona Fide Indebtedness

The IRS issued proposed regulations on the subject of when an S corporation shareholder can increase his or her basis in the S corporation’s stock based on loans to the corporation.

Reporting Life Insurance Transactions by S Corporations

There is room for disagreement, if not confusion, over how to report transactions involving life insurance on the tax returns of S corporations.

Operating a QSub

A qualified subchapter S subsidiary (QSub) is a subsidiary corporation 100% owned by an S corporation that has made a valid QSub election for the subsidiary.

Contributions Increase Shareholders’ S Corporation Basis

The Tax Court held that shareholders in two related S corporations could increase their basis in one of the corporations by contributing assets to it that they had received in a distribution from the other corporation.

Now Is the Time: Converting a C Corporation to an S Corporation or LLC

The current uncertain economic environment may present an opportunity to exit C status and its attendant double taxation at an acceptable current tax cost.

PTPs Can Use Safe Harbor to Determine COD Income That Is “Qualifying Income”

The IRS issued a safe harbor for publicly traded partnerships (PTPs) that want to avoid corporate taxation by qualifying under Sec. 7704(c) as partnerships with 90% or more of their income from qualifying sources.

Proposed Regs. on Basis for S Corporation Shareholders From Bona Fide Indebtedness

The IRS issued proposed regulations on when an S corporation shareholder can increase basis in the S corporation’s stock based on loans to the corporation.

Who Is a Limited Partner? The IRS Issues Sec. 469 Prop. Regs.

Despite its importance in assessing an individual’s tax liability, the determination of whether a person is a “limited partner” for federal income tax purposes is often uncertain.

Multistate Partnerships: To Withhold, or Not to Withhold?

The varying rules for withholding can create a compliance nightmare for multistate partnerships with a large number of partners.

The Research Credit and Deduction for Passthrough Entities

Passthrough entities may be overlooking the research tax credit because they are not aware that they are engaged in eligible activities, do not think their activities are qualified, or do not believe they can meet the various requirements.

Final Partnership Debt-for-Equity Regulations

The IRS issued final regulations that provide guidance on the recognition of discharge of indebtedness income in partnership debt-for-equity transfers.

Reporting Dilemma: Personal Use of Rental Properties

Properly apportioning real estate expenses between personal and rental use presents several challenges.

Partially Taxable Asset Acquisitions from S Corporations

Selling shareholders of an S corporation commonly seek a partially tax-deferred rollover of equity. This item describes the differing results between a transaction accomplished through a Sec. 351 transfer and one structured as part sale/part contribution.
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