C-Corporation S-Corporation

News & Analysis as of

Measure 97 (Formerly Known as Initiative Petition 28) Will Be Presented to Oregon Voters on November 8, 2016: What You Need to...

C Corporations with Oregon annual revenues greater than $25 million may face a new minimum tax obligation – 2.5 percent of the excess – if Measure 97 passes. If a business falls within this category, there may be ways to...more

Reasonable Compensation Issues Remain On the IRS Radar Part II: S-Corporation Concerns

Our May 26, 2016 article, Reasonable Compensation Issues Remain on the IRS Radar ("Part I"), discussed how the IRS scrutinizes the reasonableness of compensation payments made to C-corporation shareholder-employees. As...more

DC Circuit Decision Likely to Reignite FERC Debate Over Tax Allowance for Pass-through Entities

The recent decision by the U.S. Court of Appeals for the District of Columbia Circuit in United Airlines Inc., et al., v. Federal Energy Regulatory, Case No. 11-1479, July 1, 2016 (United Airlines) will likely reignite a...more

Rethinking Choice of Entity — Section 1202 Stock

We tax advisors spend plenty of time assessing whether a particular business is better suited operating as a flowthrough entity or as a tax-paying “C corporation.” Flow-through entities generally include sole...more

A "PATH" to Substantial Tax Savings: Qualified Small Business Stock

In the early 1990s, Congress enacted the qualified small business stock (“QSBS”) rules to incentivize equity investments in certain corporations. The QSBS rules reduce the effective federal income tax rate on the gain...more

New IRS Audit Rules: Is Your Healthcare LLC Ready?

The Bipartisan Budget Act of 2015 (the “BBA”), which was signed into law in November 2015, contains significant changes to the way the IRS will audit partnerships beginning in 2018. These changes will also have far ranging...more

The New Partnership Audit Regime Will Be Here Soon – Are You Ready?

On November 2, 2015, the Bipartisan Budget Act (“Act”) was signed into law by President Barack Obama. One of the many provisions of the Act significantly impacts: (i) the manner in which entities taxed as partnerships will be...more

"IRS Expands REIT Spin-Off Restrictions, Extends REIT Built-in Gains Period to 10 Years"

On June 7, 2016, the Internal Revenue Service (IRS) and Treasury Department issued new temporary regulations that have dramatic implications for all merger-and-acquisition activity by C corporations and real estate investment...more

How to Lessen the Tax Bite When Selling a Business

When a business is sold, both the buyer and the seller endeavor to walk away with as much cash on hand as possible. The seller hopes to reap the rewards of years of hard work; the buyer hopes to secure enough cash to...more

Why Many Manager Removal Provisions Are Doomed to Fail

Most business partners start their venture with the intent to own a property or operate a business until selling it for a large profit. Hopes are high and intentions are real. As in any relationship, there could be bumps in...more

Legislation Revives and Permanently Extends 100% Gain Exclusion for Certain Sales of (C Corporation) Qualified Small Business...

For years now, conventional wisdom has been that, wherever possible, businesses should seek to operate as flow through entities (S corporations or partnerships) for income tax purposes. One rationale for this viewpoint has...more

Should Professional Corporations Consider Making an S Corporation Election – Again?

The United States Tax Court has held that a law firm organized as a professional corporation is liable for accuracy-related penalties for treating year-end bonuses to the shareholder attorneys as compensation (deductible)...more

Critical Tax Considerations When Structuring A Family Office

A wealthy family may create a family office to achieve a wide range of objectives. These objectives may include realizing the benefits of pooled capital in order to maximize the universe of available investment opportunities...more

New Opportunity for 'C' Corporations to Convert to 'S' Corporations Under Recent Tax Law

Since 1986, when the General Utilities doctrine (permitting corporate liquidations of regular or 'C' corporations to be tax-free to the corporation) was repealed, a barrier existed for 'C' corporations to convert to...more

The Built-In Gains Tax - S Corporations Are Gaining Ground

Many business owners are aware that, if a business is operated through a C corporation, the corporation pays tax on the profits and, when the profits are distributed to the shareholders in the form of dividends, the...more

Alert: PATH Act Gives Tax Benefits to Emerging Growth Companies and Investors

On December 18, 2015, as part of passing an omnibus spending bill for fiscal year 2016, President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015 (the "PATH Act"). The PATH Act extends, in some cases...more

Before Selecting Business Form, What Is Important To Consider? P.2

In our last post, we began discussing the importance of careful planning when selecting the legal form one’s business will take. As we noted, this decision can impact a number of aspects of the business and its owners. The...more

"Congress Overhauls Partnership Audit and Litigation Procedures"

On November 2, 2015, President Barack Obama signed into law the Bipartisan Budget Act of 2015 (the Act). The Act overhauls the partnership audit and litigation rules in the Internal Revenue Code, repealing both the provisions...more

Changes in Tax Return and FBAR Due Dates and Extensions

The deadline for filing tax returns and Foreign Bank Account Report (FinCEN Form 114) (FBAR) has been changed by the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. Below is a brief summary of...more

Sweeping Change to Partnership Tax Audit Procedures

A major change to partnership audits was signed into place by President Barack Obama on November 2nd following the passage of the Bipartisan Budget Act of 2015 by Congress on October 30th. Previously, partnerships with more...more

Basic Tax Issues in Mergers and Acquisitions

Mergers and acquisitions ("M&A") are complex, multilayered transactions with multiple moving parts and a healthy dose of negotiation. There are, however, common tax implications at play in most transactions of which...more

FBAR Deadlines Not as Close as You Think: New Tax Bill's Language Points to 2017 as Likely Timetable

Thank you for your interest in the 5th Annual IRS Hot Topic Seminar held in Jerusalem in July. In continuing our efforts to provide timely and extremely important updates on tax matters affecting U.S. citizens and green card...more

Congress Sneaks in Some Important Procedural Tax Changes

On July 31, 2015, President Obama signed HR 3236, the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015." While you wouldn’t know it from the title, Congress included some important procedural...more

New Tax Provisions Affecting Filing Deadlines For Partnerships, Corporations and Trusts (8/15)

On July 31, 2015, President Obama signed into law P.L. 114-41, the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015." Although this new law was primarily designed as a 3-month stopgap extension...more

Commission Payments to IC-DISC Recharacterized as Non-Deductible Dividends

In Summa Holdings, Inc. v. Commissioner, T.C. Memo 2015-119, the Tax Court recharacterized an exporter’s deductible commission payments made to an IC-DISC as non-deductible dividend payments to the exporter’s shareholders...more

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