News & Analysis as of

S-Corporation

Entity Selection Series | Part Three: The Benefits of an S-Corporation

In Part One and Part Two of the Entity Selection Series, we discussed the benefits of a Limited Liability Company and a C-Corporation for organizing a venture business. In this edition, we will discuss the benefits (and...more

Developments in FICA and self-employment tax affect partners and S corporations

by Thompson Coburn LLP on

I was recently honored to serve as a guest columnist in the June 2017 “Shop Talk” column in WG&L’s Journal of Taxation. The article, “Developments in FICA and Self-Employment Tax Affect Partners and S Corporations,” tied...more

Sports Teams Can Deduct Full Cost of Pre-Game Meals for Traveling Employees at Hotels at Away Games

by Cozen O'Connor on

Overview - In a surprising decision, the Tax Court has allowed the owners of the Boston Bruins hockey team (a subchapter S corporation) to deduct 100 percent of the cost of pre-game meals at hotels for employees while...more

IRS gets upper hand in S corporation compensation audits

by Thompson Coburn LLP on

Any compensation the owner receives is subject to FICA tax, which imposes an equivalent burden. And the IRS frequently attacks owners who receive cash distributions from an S corporation, arguing that the distributions were...more

New York State 2017-18 Budget Legislation Contains Numerous Tax Changes

by McDermott Will & Emery on

In early April, the New York State Legislature passed its 2017-2018 budget legislation, which Governor Cuomo signed into law on April 10. This legislation contains numerous changes to the New York State Tax Law....more

Deducting Payments Between Related Parties

by Farrell Fritz, P.C. on

Potential for Abuse- Many years ago, Congress decided that taxpayers who were “related” to one another should be required to use the same accounting method with respect to transactions between them in order to prevent the...more

Reissuance of Proposed Regulations on Partnership Audit Rules

by Dechert LLP on

The U.S. Treasury Department and the Internal Revenue Service (the “IRS”) have re-issued proposed regulations (the “Proposed Regulations”) on the new centralized partnership audit rules enacted as part of the Bipartisan...more

IRS Re-Releases Partnership Audit Regulations

The IRS has released proposed regulations implementing the new centralized partnership audit rules. These regulations are virtually identical to the regulations that were released and then pulled in January of this year. ...more

IRS Announces Tax Audit Targets

Over the past several years, IRS has reduced the number of its tax auditors by about 25 percent – from just over 12,000 tax auditors in 2011 to about 9,000 tax auditors in 2015. This staffing reduction has forced IRS to focus...more

What the New Kansas Income Tax Bill Will Mean for Individuals and Businesses

by Stinson Leonard Street on

The saga of Kansas income tax law changes concluded earlier this week when Kansas lawmakers overrode Gov. Sam Brownback's veto of a bill that dismantled the governor's signature tax cuts. With the state facing an estimated...more

MoFo New York Tax Insights - Volume 8, Issue 6

by Morrison & Foerster LLP on

Judge Dismisses $2.4 Billion False Claims Act Suit Brought Against Citigroup - A New York State Supreme Court Judge has dismissed a qui tam False Claims Act (“FCA”) suit brought by Eric Rasmusen, an economics professor at...more

Life insurance planning for the business owner

by Thompson Coburn LLP on

Life insurance is an effective tool that business owners can use to provide liquidity at their passing for both their businesses and their families. Having a properly drafted buy-sell agreement is key to avoiding conflict and...more

Illinois Senate passes "privilege tax" – deadline for final action is today

by DLA Piper on

The Illinois Senate has passed SB 1719, which would impose a 20 percent "privilege tax" on fees earned by partnerships and S corporations engaged in the business of conducting "investment management services."...more

Restricted Stock & Employee-Shareholders

by Farrell Fritz, P.C. on

Close Corporations and Compensatory Grants of Equity- It should come as no surprise to readers of this blog that I am not enamored with the notion of issuing equity to employees of a closely-held business. It’s not that...more

Legislation Relating to Capital Formation

As the 115th United States Congress is currently in session, a number of bills designed to promote capital raising for companies have been introduced in both the House and the Senate. In the last two months, both the House...more

MoFo New York Tax Insights - Volume 8, Issue 5

by Morrison & Foerster LLP on

Final 2017-18 New York State Budget Bill Enacted - The New York State Budget Bill was enacted by the New York State Legislature and signed into law by Governor Andrew M. Cuomo. S. 2009-C, A. 3009-C. Among the Governor’s...more

S-Corps, Basis & Loss Limitations

by Farrell Fritz, P.C. on

In General- It is a basic principle of federal tax law that a taxpayer cannot, for purposes of determining the taxpayer’s taxable income, claim a loss with respect to an investment in excess of the taxpayer’s unrecovered...more

Using an S corporation to avoid self-employment tax

by Thompson Coburn LLP on

Our last post discussed self-employment (SE) tax and taxpayers’ efforts to avoid that tax when using an entity taxed as a partnership to conduct business. It concluded that a limited partnership that conducted business...more

Recent Tax Court Cases Serve As Reminder Of Tax Risks Of Shareholder Guarantees Of Loans To S Corporations

by Dickinson Wright on

Two recent Tax Court cases are reminders that shareholder guarantees of loans to an S corporation do not generally create basis that can be used by the shareholder to deduct losses. Under Internal Revenue Code...more

[Webinar] Landmark Tax Court Self-Employment Tax Decision; Post-Mortem Planning for Business Owners; Reimbursing Deemed Owner of...

by Thompson Coburn LLP on

This free webinar will orally discuss my 1st Quarter 2017 newsletter, including: - For the first time ever, the Tax Court ruled that a member of a limited liability company was not subject to self-employment tax. We...more

For High-Income and International Taxpayers: Defensive Tax Planning

The Importance of Defensive Tax Planning - IRS audit criteria target high-income taxpayers, especially those with reported foreign income or foreign financial assets. Targeted high income taxpayers include...more

New Partnership and Corporate Tax Return Filing Dates Now in Effect

As I previously discussed, the federal tax due date for partnership and corporate tax returns changed for tax years on or after 2016. This means that the new filing deadlines are now in effect. Partnership and S corporation...more

House Discusses How to Tax Small Businesses

by McNair Law Firm, P.A. on

A proposal presently being discussed before the House Ways and Means Committee (where tax laws begin) addresses how small business income will be taxed. President Trump and the Republican-controlled Congress both desire...more

New Tax Filing Deadlines Affect Unsuspecting LLCs and Partnerships For 2017

Several tax bills passed by Congress late in 2015 changed the deadlines for filing federal income tax returns for partnerships and most limited liability companies, which are treated as partnerships for tax purposes. Other...more

Just When We Thought Measure 97 Was Dead—It May Be Back!

by Garvey Schubert Barer on

As I reported previously, Oregon Measure 97 was overwhelmingly defeated by voters in the state’s general election this past November. It certainly appeared that the voters spoke loudly and clearly on November 8, 2016, when...more

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