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.
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Topics
Tax Planning; Tax Minimization
Massachusetts state tax implications for sales of PTE interests
When the sale of an interest in a PTE is contemplated, planning for state sourcing and taxability of the gain should both be considered so the owners avoid a large — and sometimes unexpected — state income tax liability.
State PTE elections: A big picture perspective
Practitioners may face a difficult analysis in helping their clients understand their possible PTE election opportunities.
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.
Payment of S corp.’s expenses by affiliated companies did not increase shareholder’s basis
A tax court recently found that where an S corp. and affiliated entities were partially owned by a taxpayer, payment of the S corp.’s expenses by the affiliated entities did not increase the taxpayer’s debt basis in the S corporation.
Using R&D credits to reduce payroll taxes: An overlooked opportunity for startups
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.
Shareholder cannot unilaterally change an S corp.’s election
Regulations explicitly require elections to be made by the corporation, and shareholders themselves cannot change these elections.
S corporation shareholder cannot take FICA tip credit
An S corporation shareholder cannot unilaterally change an S corporation’s tax election in order to claim FICA tip credits.
Understanding the new Sec. 199A business income deduction
The new deduction allows certain business owners to keep pace with the significant corporate tax cut provided by the Tax Cuts and Jobs Act.
Tax Court holds microcaptive insurance company was not a bona fide insurer
Tax Court held that amounts passthrough business entities paid to a purported insurance company they
owned were not premiums paid for insurance contracts and not deductible.
Items and factors to consider in setting reasonable compensation
All companies should maintain supporting documentation for payments.
Tax Court allows full meal deduction for NHL team’s away games
Pregame meals provided to Boston Bruins players and personnel before away games qualify as a de minimis fringe benefit.
Boston Bruins can deduct full cost of meals for team’s away games
The Tax Court held that the owners of the Boston Bruins could deduct the full cost of their team’s pregame meals for away games as a de minimis fringe benefit.
Asset Acquisition Target Ineligible for Success-Based Fee Safe Harbor
Recent Chief Counsel Advice provides helpful insight to taxpayers planning or negotiating merger and
acquisition transactions.
Documenting Deductible Transaction Costs for Acquisitive Transactions
This item discusses the ability of a target in a Sec. 338(h)(10) transaction to use the safe-harbor election provided by Rev. Proc.
2011-29.
Ordinary Deduction for Worthless QSub Stock
Restructuring an existing QSub in an attempt to qualify for an ordinary deduction is prohibited and might result in an unfavorable deferral of loss.
Computing the Domestic Production Activities Deduction for Passthrough Entities
Some unique issues can arise when computing the domestic production activities deduction for a passthrough entity.
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.
Sec. 179D and Passthrough Entities
The Sec. 179D deduction available for building designers has unexpected consequences for design firms structured as passthrough entities.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
