This annual update on S corporations covers cases, regulations, and IRS rulings that have been issued in the last year, including the rules for eligible terminated S corporations.
Distributions & Shareholder Basis
This update on recent developments in taxation relating to S corporations includes cases and rulings on eligible shareholders, electing small business trusts, inadvertent S election terminations, and other issues, as well as changes made by the TCJA.
The passthrough of S corporation losses to the extent of the shareholder’s basis in his or her stock and debt can be beneficial, but the resulting reduced basis debt may lead to taxable income on repayment of the debt.
A taxpayer’s amended returns sufficiently apprised the IRS of inconsistencies between the amended returns and the returns filed by the bankruptcy trustee of his wholly owned S corporation.
This item discusses how a back-to-back loan is a viable option for shareholders who want to increase their debt basis in an S corporation.
Individuals, partnerships, or other noncorporate entities that could not benefit from a Sec. 338(h)(10) election may be able to qualify for a Sec. 336(e) election.
Loans among related entities were not bona fide indebtedness that would give rise to debt basis in an S corporation for the shareholder.
An understanding of S corporation basis rules enables practitioners to assist clients in taking advantage of planning opportunities aimed at maximizing deductible passthrough losses.
The AICPA S Corporation Taxation Technical Resource Panel offers a summary of recent court decisions and IRS guidance.
Tracking these accounts is important if an S corporation enters into certain transactions such as redemptions, liquidations, reorganizations, or corporate separations.
Direct shareholder loans to an S corporation can be very important tools for tax planning.
A recent Tax Court decision sheds light on the importance of lease terms to determine what is rent and how Sec. 467 may apply to advance rents.
This item provides an overview of the U.S. income tax implications of cancellation-of-debt income that results from bankruptcy or insolvency, with a focus on the differences in the tax treatment for C corporations, S corporations, and partnerships.
S corporations and their shareholders often engage in transactions in which they transfer property with a basis greater than its FMV. This article examines the tax effects on both shareholders and the corporation.
The IRS issued final regulations addressing the basis of indebtedness of S corporations to their shareholders.
Final regulations were issued on S corporation shareholder basis of indebtedness of the S corporation to the shareholder only if the indebtedness is bona fide and on the deductibility of startup expenditures and organizational expenses for partnerships following a termination of a partnership.
This article covers the taxability of distributions from an S corporation with accumulated E&P and ancillary issues and planning opportunities.
This article discusses major changes and developments that directly affect S corporations and their tax advisers during the period of this update (July 10, 2012–July 9, 2013).
A taxpayer’s basis is often scrutinized by the IRS, particularly when basis is claimed based upon debts incurred by a flowthrough entity.
An S corporation’s revocation of its S corporation status, which caused its QSub subsidiary to lose its status as a QSub, was not a post-bankruptcy-petition transfer of property of the QSub’s bankruptcy estate.