S Corporation Income Taxation

TOPICS / PASSTHROUGHS

February 1, 2023

The ‘one class of stock’ requirement: An interesting letter ruling

While it might stand to reason that if there is only one shareholder, then there can be only one class of stock, that is not necessarily what the Code and regulations provide.

December 9, 2022

Domestic filing exception requirements modified in draft Scheds. K-2, K-3

Revised draft instructions for partnership and S corporation Schedules K-2 and K-3 contain significant changes to the requirements to qualify for the domestic filing exception for filing and furnishing the 2022 schedules.

November 1, 2022

Inadvertent terminations of S and QSub elections

The IRS addressed a consolidated corporation’s request to apply Sec. 1362(f) to provide relief from termination of the corporation’s subsidiary’s S corporation and QSub elections.

October 1, 2022

Rolling over shares upon S corporation’s acquisition

This item discusses nonprorated S corporation rollovers and the unexpected tax consequences.

September 1, 2022

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.

August 1, 2022

State PTE elections: A big picture perspective

Practitioners may face a difficult analysis in helping their clients understand their possible PTE election opportunities.

August 1, 2022

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.

July 1, 2022

Current developments in S corporations

The AICPA S Corporation Taxation Technical Resource Panel summarizes recent developments.

May 1, 2022

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)).

May 1, 2022

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.

May 1, 2022

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.

April 28, 2022

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.

April 13, 2022

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.

April 1, 2022

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.

March 15, 2022

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.

February 11, 2022

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.

February 1, 2022

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.

December 20, 2021

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.

December 1, 2021

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.