S Corporation Income Taxation

Deferring gain in liquidation with an installment sale and noncompete agreement

Liquidating S corporations may defer corporate-level gain by distributing a qualifying installment obligation arising in a 12-month liquidation period; a planning strategy pairs this exception with a noncompete agreement.

Guidance on research or experimental expenditures under H.R. 1 issued

The revenue procedure advises taxpayers how to make various elections, file amended returns, and change accounting methods as provided under Section 70302 of the new law.

AICPA presses IRS for guidance on domestic research costs in OBBBA

In its letter, the AICPA said small businesses that have not filed returns for the 2024 filing period face uncertainty about how to treat domestic research and experimental expenditures.

IRS includes several AICPA recommendations in corporate AMT interim guidance

In a notice issued Tuesday, the IRS said it intends to partially withdraw proposed regulations and issue revised proposed regulations.

Current developments in S corporations

This annual update covers recent developments relating to S corporations, including IRS relief for common inadvertent S election lapses; the transfer of clean-energy credits; and other cases, rulings, and regulations.

AICPA makes Priority Guidance Plan recommendations to IRS

In addition to its 183 recommendations for the IRS plan, the AICPA encouraged the agency to continue to pursue tax simplification.

Simplified method to determine corporate AMT applicable status issued

A notice issued by the IRS with interim guidance for the application of the corporate alternative minimum tax offers an optional simplified method for determining applicable corporation status under Sec. 59(k).

How S elections go wrong and how to fix them

Problems with S elections frequently cause them to be invalid when made or to terminate. This article discusses four of the most common ones and three revenue procedures that may enable S corporations to fix them without obtaining a costly letter ruling.

Deemed liquidation on electing QSub status

An S corporation’s qualified Subchapter S subsidiary election for an existing corporation is a deemed tax-free liquidation under Secs. 332 and 337 if certain requirements are met.

How Trump’s opposition to global tax deal may affect businesses

The Trump administration has rejected the OECD’s initiative to reform the taxation of multinational enterprises. Learn more about the executive action in this Q&A with an international tax expert.

Strategies for information return penalties and Form 945 assessments

Penalties for failure to file correct information returns and backup withholding can be waived, but timely and correct responses to IRS notices are essential.

AICPA to Congress: Delay needed in BOI reporting deadline

Without a delay, “millions of small business owners become accidentally and unknowingly delinquent in their compliance,” reads the letter, signed by CEO Barry Melancon, CPA, CGMA.

CRFB leader: Tax policy may not be a Trump administration high priority

The head of the nonpartisan Committee for a Responsible Federal Budget told the AICPA & CIMA National Tax Conference that extending the Tax Cuts and Jobs Act would add $5 trillion to the national debt.

Corporate AMT prop. regs. impose new partnership information tracking system

This article outlines a five-step process for calculating a corporate partner’s distributive share related to the application of the corporate alternative minimum tax imposed on an applicable corporation pursuant to Sec. 56A.

Cleaning up intercompany debt

An intercompany loan between related corporations may be recharacterized as an equity contribution by the companies’ shareholders, resulting in a constructive dividend to the shareholders. This article focuses on a recent Tax Court case involving the proper characterization of purported intercompany loans between two S corporations.

Choice-of-entity analysis with the TCJA sunset approaching

Educators as well as practitioners can model the tax effects of choice of entity and possible scenarios of tax law change.

Intangible property repatriation rules finalized

The regulations terminate the continued application of the Sec. 367(d) annual inclusion in certain cases when intangible property is repatriated to the United States after previously being transferred to a foreign corporation.

Advising S corporation clients on reasonable compensation

Advising owner-shareholders can prove invaluable in meeting guidelines for distinguishing compensation from distributions.

Corporate AMT proposed regulations issued; some penalties waived

The IRS issued proposed regulations providing guidance on the corporate alternative minimum tax (AMT) and a notice that waives the penalty for failure to pay estimated tax with respect to the corporate AMT for 2024.

Recent developments in states’ PTETs

This column offers updates and resources regarding the passthrough entity taxes that have been implemented in three dozen states.
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