The most popular form of business entity is the S corporation. S corporations create special reporting and transactional issues because they follow the “entity” approach applicable to all corporations. The tax result can be a combination of provisions found in subchapter C and subchapter S. For this reason, although both partnerships and S corporations are flow through entities, the tax result of similar transactions can be very different in the two entity types.
This session is “Part I” of a two-part program on the taxation of S corporations and their shareholders. This session will review many of the basic provisions of subchapter S and will help prepare both staff and management for dealing with more complex tax concepts applicable to both S corporations and their shareholders.
In this four-hour course, nationally recognized tax expert and instructor James Hamill, CPA, Ph.D., will explain the taxation of S corporations by use of commonly encountered transactions. The session will generally follow a “life cycle” approach, beginning with a review of what “entity” concepts mean and then leading into the formation of an S corporation. It will then begin to address common transactions that S corporations engage in during their “lives.”
Publication Date: December 2021
Designed For
Experience with S Corporation Tax Returns.
Topics Covered
- Entity Approach
- S election mechanics
- Curing defective elections
- Types of permitted shareholders
- Single class of stock and capital structure issues
- Straight debt uses and requirements
- Formation tax issues — corporation and shareholder
- Allocations of Profit and Loss
- Allocations when ownership changes
- Separately-stated items
- Distributions from S corporations
- Redemptions of S corporation stock
- PPP loan issues — deductions, basis adjustments, AAA
Learning Objectives
- Determine the consequences of forming an S corporation
- Identify key tax reporting issues
- Describe how to select an accounting period
- Identify how to articulate allocations of profit and loss
- Determine how to structure liabilities to create basis
- Recognize how to explain the rules affecting S corporation distributions
- Describe the entity approach and why it matters
- Identify what applies regarding the single class of stock, "mix ups" not caused by governing provisions may be acceptable, provided some corrective action is taken
- Recognize which form is used to elect to be treated as an S Corporation
- Recognize which form is used to treat one or more of its eligible subsidiaries as a qualified subchapter S subsidiary
- Identify what is a consideration when converting a C Corporation to an S Corporation
- Describe how many levels of tax S Corporations have
- Recognize which type of tax is intended to preserve the corporate-level tax attributable to a former C corporation
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (4 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
James R. Hamill
Dr. Hamill is the Director of Tax Practice at Reynolds, Hix & Co., P.A., in Albuquerque, New Mexico. He is the author of more than 36 CPE courses and more than 100 articles in professional tax journals and writes a weekly column on tax issues for the Albuquerque Journal. He has lectured on structuring tax transactions throughout the country for international CPA firms, State CPA Societies, and numerous other organizations. He has developed and instructed webinars on a variety of tax topics over the past 10 years. He is a CPA in New Mexico, a past Chair of the New Mexico Society of CPAs, and has 40 years of experience in tax practice.