Corporate Tax: Formation and Operation

Author: Jennifer Kowal

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2026 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

After the reduction in the corporate tax rate under the Tax Cuts and Jobs Act, operating a business in corporate form has become more attractive and many taxpayers may opt to form corporations. This course covers the tax consequences of forming a corporation and operating in corporate form, including contribution of property to a corporation, the effects of the corporation assuming shareholder liabilities on contributed property, contribution of services in exchange for stock, and the tax effect of distributions to shareholders.

Publication Date: July 2023

Designed For
Tax practitioners at all levels who advise on the taxation of forming and operating corporations.

Topics Covered

• Consequences of contributing property to corporations
• Assumption of liabilities by corporation and liabilities in excess of basis
• Requirement for control of corporation immediately after exchange
• Receipt of stock in exchange for services
• Tax consequences of distributions to shareholders

Learning Objectives

• Describe the tax consequences of contributing property to corporation, from shareholder and corporate perspective, including tax basis consequences
• Recognize the effect of liabilities on contributed property
• Describe requirement that shareholders have control immediately after exchange and consequence of contributing services in exchange for stock
• Recognize and explain the consequences of distributions to shareholders, including difference between dividends and other distributions

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None