S-Corporation

News & Analysis as of

High Net Worth Family Tax Report, Vol. 9, No. 1

In This Issue: - Congressman Camp Camp Releases His Long-Awaited Tax Reform Plan - Tax Court Addresses Valuation Issues Related to Tax on Built-In Corporate Gain - Shareholder of S Corporation Required to Include...more

‘S Wonderful, ‘S Marvelous, ‘S Unreasonable

One of the reasons to choose an S-Corp instead of an LLC is tax savings. An S-corp does not pay any taxes at the corporate level, but instead all income is passed through to the shareholders, who are responsible for a number...more

Selecting the Right Employee Incentive Plan Can Be Tricky

The purpose of an employee incentive plan, regardless of the specific type or form that it takes, is to more closely align a key employee’s financial interests with the company’s. The company owners’ challenge when developing...more

Camp Goes All-In with Comprehensive Tax Plan: Highlights, Tax Reform Status and Impact on Taxpayers

On February 26, Representative Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, released his much-awaited comprehensive tax reform plan (the “Camp Proposal”). That proposal seeks to cut marginal tax rates...more

What You Need to Know About S Corporations in California

Are you looking to start a new business in California? If so, you may have heard about S corporations. However, contrary to popular belief, an S corporation is not a business structure — it is a tax status. Any standard...more

Calif. Taxpayers: You Can['t] Check Out Any Time You Like

For California's high-earners and business owners, Proposition 30's passage in November 2012 was a "cross the Rubicon" moment. First, Proposition 30 increased tax rates retroactively to the beginning of 2012....more

Locked Out S Corporation Shareholder Still Taxable

In a recent Tax Court case, a 40% shareholder of an S corporation medical practice was locked out of the office and the practice by the 60% shareholder. Nonetheless, at the end of the tax year, the S corporation issued a Form...more

Careful Estate Planning Required When Transferring S Corporation Shares to Trusts

S corporation shareholders must be careful not to inadvertently terminate their closely held company’s S election when engaging in estate planning....more

IRS Limits Losses Sustained by Trusts

Since 1986, Section 469 of the Internal Revenue Code has imposed limitations on the ability of most taxpayers to offset losses from activities in which they do not materially participate against wages and other non-passive...more

Equityholder's Strategy for Shifting Tax Burdens to Creditors Upheld by Third Circuit

In re Majestic Star Casino, LLC, F.3d 736 (3rd Cir. 2013), the U.S. Court of Appeals for the Third Circuit broke from other courts by holding that S corporation status (or "qualified subchapter S subsidiary" or "QSub" status)...more

Beware: Active Participation of Trustee S-Corporation Shareholder is Required – Technical Advice Memorandum 201317010

Differing points of view have arisen regarding determining the active participation of S-Corporation shareholdings held in Trust....more

Tax Talk -- Volume 6, No. 2 -- July 2013

In This Issue: IRS Leaves Potential REIT Conversions Hanging; IRS Proposes to Relax Wash Sale Rules for Floating NAV Money Market Fund Share Redemptions; IRS Confirms Mexican Land Trust Is Not Trust Under U.S. Tax Law;...more

Fiduciary Duties In Oil Patch Deals

I. GENERAL. A. Introduction. In selecting a form of business entity for an oil patch deal in Texas the organizer or initial owners can consider the following five business entity forms: • Corporation •...more

State of the Union - Part 2: Retirement with a Capital R

Overview - Since my last article, I have received some hate mail. Well, not quite literally unless I count the note from Mrs. Nowotny asking me why I forgot half of the items on the grocery list. A number of readers...more

Legislative Update: Business Law

I. GENERAL. A. Introduction. In selecting a form of business entity in Texas the organizer or initial owners can consider the following five business entity forms: • Corporation • General...more

United States v. Windsor: Tax Issues

Although the decision of the United States Supreme Court in United States v. Windsor invalidating much of the Defense of Marriage Act (DOMA) affects at most approximately 20% of the population of the United States, it has...more

State & Local Tax Alert: Recent Developments in the State Taxation of Pass-Through Entities

In This Issue: - Nonresident Owner Nexus - Apportionment of Multistate Income - Entity-Level Income Tax Withholding - Composite Returns - Entity-Level Taxes - Issues Unique to S...more

Final Section 336(e) Regulations Allow Step-Up in Asset Tax Basis in Certain Stock Acquisitions

Final regulations were issued last month under IRC Section 336(e). These regulations present beneficial planning opportunities in certain circumstances....more

Tax Planning for the “New Normal”

Effective January 1, 2013, the American Taxpayer Relief Act of 2012 (“ATRA”) was enacted into law, finally settling years of debate over the fate of the Bush era tax cuts. On the same day, the 3.8% Medicare Tax on net...more

High Net Worth Family Tax Report, Vol. 8, No. 2 -- May 2013

President’s fiscal year 2014 budget contains numerous tax provisions - President Barack Obama released his proposed budget for the government’s fiscal year 2014 on April 10, 2013, and, not surprisingly, the budget...more

MoFo New York Tax Insights - Volume 4, Issue 5 - May 2013

In This Issue: New York Enacts Significant Changes to Related Member Royalty Add-Back Law; Nuclear Power Plant That Produces Steam and Water to Generate Electricity Not Eligible for Investment Tax Credit; Appellate...more

Which Entity Should I Form For My Business Enterprise?

Whether starting a business or operating an existing enterprise, business people should consider the legal form of their business and the need to protect their personal assets from business liabilities, while also considering...more

Do You Want to Start A Business? Top 10 Questions & Answers For Business Start-Ups

When starting a new business, our clients often have several questions and more often than not their questions are the same. This article summarizes some of key questions and answers that our clients have asked us....more

LLC’s Electing To Be ‘S’ Corporations

Most entities operating as ‘S’ corporations are corporations formed under state law. However, under the check-the-box rules, a limited liability company (LLC) can elect to be taxed for federal tax purposes as a corporation....more

Obamacare Taxes, And Sales Of Partnership And Subchapter ‘S’ Interests

Have you given any thought to how Obamacare’s new 3.8% tax on investment income and gains will apply to sales of interests in partnerships and Subchapter S corporations? No, I didn’t think so....more

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