Questions to consider before electing into a PTE tax
Twenty-nine states have enacted a passthrough entity tax as a possible workaround to the federal state and local tax deduction cap.
S Corporation Income Taxation
State PTE elections: A big picture perspective
Practitioners may face a difficult analysis in helping their clients understand their possible PTE election opportunities.
Avoiding inadvertent termination of an S election
A number of disqualifying events can terminate a corporation’s S status, and not all of those events are listed in the statute or immediately obvious.
Current developments in S corporations
The AICPA S Corporation Taxation Technical Resource Panel summarizes recent developments.
Tax planning and considerations: S corporation targets
Approval of an S election by the IRS and/or a state jurisdiction does not mean that S corporation status remains safe and sound forever.
Trusts as S corporation shareholders
Generally, a trust cannot hold stock of an S corporation; however, grantor trusts, testamentary trusts, voting trusts, ESBTs, and QSSTs are permissible S corporation shareholders (Sec. 1361(c)(2)).
Trusts for holding S corporation interests: QSSTs vs. ESBTs
This article compares the relative advantages and disadvantages of a QSST versus an ESBT in estate planning.
Schedules K-2 and K-3 e-file capability postponed for S corporations
The IRS delays e-filing capability for schedules reporting S shareholders’ items of international tax relevance, earlier forecast for mid-June, to July 24.
More Schedule K-2 and K-3 FAQs posted
In eight new FAQs on its website, the IRS covers some special issues, including several that it says will be added to the forms’ instructions.
Making tax-free distributions to the extent of AAA
AAA and AE&P calculations are key to determining stock basis and, thus, the taxability of shareholder distributions.
Illegal tax shelter seller finds no shelter in stock forfeiture provision
S corporation stock was not subject to a substantial risk of forfeiture because the stock forfeiture provision was unlikely to be enforced.
IRS waives estimated-tax penalties for farmers and fishermen
The IRS, citing earlier problems e-filing a new form reporting S corporation owners’ basis, has granted relief to certain farmers and fishermen who missed their March 1 filing deadline.
Complying with new schedules K-2 and K-3
What partnerships, S corporations, and others with foreign partnership interests need to know for tax year 2021 and beyond.
S corporation shareholder recomputation of basis
stock and debt basis under Sec. 1366(d)(1). Failing to properly track basis may require a recomputation of the shareholder’s basis.
SALT payments before year end a priority for passthroughs
To be deductible at the entity level, payments by passthrough entities of state and local taxes should be made in the tax year of the liability, but state-specific elections may complicate that timing, tax advocates advise.
Minimizing a hobby loss issue by electing S status
To avoid the hobby loss rules, with their limitation on deductible expenses, an activity must be engaged in for profit; electing S status can help a taxpayer establish profit motive.
Illinois PTE tax would provide SALT cap workaround
This item discusses Illinois Legislature's S.B. 2531, which includes a PTE tax that allows a workaround to the federal $10,000 limitation for state and local tax deductions.
Comparing stock sales and asset sales of S corporations
The issue of a stock sale versus an asset sale raises a number of significant issues to be considered by S shareholders.
Current developments in S corporations
This update on recent developments in taxation relating to S corporations includes cases and rulings on eligible terminated S corporations, S corporation income and losses, the one-class-of-stock requirement, and other issues.
Where individual, corporate, and passthrough entity taxation meet
Passthrough owners must consider many risks and uncertainties, in addition to political trends on Capitol Hill, before opting into a state-level regime designed to bypass the $10,000 SALT deduction cap created by the TCJA.
