Avoiding Tax Pitfalls in C Corp to S Corp Elections: Built-in-Gains, Earnings and Profits, Passive Income, and Other Issues

A live 110-minute CPE webinar with interactive Q&A

Thursday, June 15, 2017
1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, May 26, 2017

This webinar will equip tax counsel and advisers with the tools to advise C Corporation clients of the benefits and potential tax drawbacks of terminating C Corp status in favor of making an S election. The panel will dissect the necessary considerations involved and outline ways to minimize potentially negative tax consequences involved in an S conversion.


Converting a C Corporation to an S Corporation often provides benefits to owners of closely held businesses. However, there are several factors that advisers must consider when counseling clients on the tax consequences of an existing entity making an S election. Although S Corporations can provide significant tax advantages over C Corporations, there are potentially costly tax issues that must be addressed before converting from a C Corporation to an S Corporation.

A potential tax trap in converting from a C to an S Corporation is the built-in gains tax under Section 1374. If a converted S Corporation sells appreciated property within a 5-year period after S election, the gains are taxed at the entity level at 35%. The built-in gains tax applies to goodwill, so disposition of the assets of the company as a going concern within the 5-year period generates a corporate level tax.

Also, converted S Corporations are subject to a corporate level tax if their passive investment income exceeds 25% of their gross receipts and they have accumulated earnings and profits from the C Corporation. If the corporation owes this tax for three consecutive years, the S election will be terminated.

Listen as our panel of experienced practitioners offers detailed best practices to make tax-efficient conversions from C Corp to S Corp election status, providing you with valuable planning tools to prepare clients for a seamless S election of an existing entity.


  1. Tax efficiencies and limitations of an S Corporation conversion
    1. Elimination of corporate layer of tax
    2. S Corporations and LLCs
  2. Pre-conversion factors to consider in advising clients
    1. Built-in gains tax
    2. Tax on excess passive income
    3. Tax on certain accumulated earnings and profits
    4. Treatment of existing corporate net operating losses
  3. Planning opportunities
    1. Timing of disposition of Section 1374 assets
    2. Pre-conversion distribution of earnings and profits


The panel will address these and other relevant questions:

  • When is conversion to an S Corporation more beneficial than a liquidation and re-incorporation into an LLC?
  • What are the major tax traps that must be identified before converting from a C Corporation into an S Corporation?
  • What steps can a C Corporation take prior to conversion to minimize or eliminate negative tax consequences from an S election?
  • What calculations must a C Corporation make on assets and goodwill prior to making an S election?
  • What implications may a conversion to an S-Corporation have in a subsequent disposition of the business?

Learning Objectives

After completing this course, you will be able to:

  • Recognize the pitfalls of making a S election
  • Indicate when the built-in gains tax will be imposed
  • Determine when passive net income under IRC Sec 1375 occurs
  • Identify the requirements under IRC Sec 531 accumulated earnings tax
  • Indicate the asset tax treatment under IRC Section 1031


Scott A. Harty, Partner
Alston & Bird, Atlanta

Mr. Harty focuses his practice on complex domestic and cross-border commercial transactions, including taxable and tax-free mergers and acquisitions, joint ventures and corporate restructurings. He has substantial experience advising corporate and private clients on all facets of U.S. inbound and outbound investments, including treaty planning, due diligence in acquisitions, investments in U.S. real estate, Subpart F and withholding tax issues arising under FATCA. He also represents clients in tax controversy matters through the audit process and administrative appeals, including the negotiation and settlement of taxes and civil penalties. He handles tax audits for public and private companies, income and gift tax audits for individuals and cases with significant offshore trust and foreign corporate tax issues. 

L. Andrew Immerman, Partner
Alston & Bird, Atlanta

Mr. Immerman concentrates on federal income tax matters, including domestic and international tax planning and transactional work for joint ventures, partnerships, limited liability companies and corporations. He has helped structure many sophisticated partnership and limited liability company transactions and has represented the target or the acquirer in numerous corporate mergers and acquisitions.

Allen Magee, CPA, Partner
Dixon Hughes Goodman, Atlanta

Mr. Magee focuses on providing tax compliance and consulting services to public and private companies in a variety of industries, including manufacturing, distribution, automotive dealerships, restaurant groups, real estate, and technology companies. His public company practice focuses primarily on tax consulting and compliance surrounding income tax issues facing multi-state and consolidated corporate groups. He also has extensive experience assisting clients in the preparation of quarterly and annual estimated tax accruals (ASC 740). He also concentrates his tax consulting and compliance experience in dealing with the income tax flow-through entity issues for multi-state S corporations, partnerships, and their respective investors. He has extensive experience in assisting many private businesses with the tax planning issues related to selling their businesses to outside investors.

Registration per Person for Live Event

Live Webinar $197.00

Includes Early Discount Savings of $50.00 (through 05/26/17)

Live Webinar & CPE Processing $232.00

Includes Live Webinar Early Discount Savings of $50.00 (through 05/26/17)

CPE per Person on Live Event

Continuing Professional Education credit processing is available for an additional fee. CPE processing must be ordered prior to the event. To qualify for CPE you may not listen via the telephone.

This program is eligible for 2.0 CPE credits.

  • Field of Study: Taxes.
  • Level of Knowledge: Intermediate.
  • Advance Preparation: None.
  • Teaching Method: Seminar/Lecture.
  • Delivery Method: Group-Internet (via computer).
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of verification codes announced throughout the presentation.
  • Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of Chapter C corporate structure, retained earnings calculations. Specific knowledge of Subchapter S rules and operations; familiarity with passive income rules and concept of built-in gain.

NOTE: CPE credit processing for all attendees must be ordered by 2pm Eastern the day of the program to receive a Certificate of Attendance within 24 hours.


Recorded Event

Includes full event recording plus handouts (available after live webinar).

Note: Self-study CPE and EA credits are not offered on recorded events.

Recorded Webinar Download $197.00
Available 48 hours after the live event

Includes Early Discount Savings of $50.00 (through 05/26/17)

How does this work?

Recorded Audio Download (MP3) $197.00
Available 24 hours after the live event

Includes Early Discount Savings of $50.00 (through 05/26/17)

How does this work?

DVD (Slide Presentation with Audio) $197.00 plus $9.45 S&H
Available ten business days after the live event

Includes Early Discount Savings of $50.00 (through 05/26/17)

How does this work?

Registration Plus Recorded Event

Best value!

Live Webinar & Webinar Download $294.00

Includes Special Savings of $200.00 (through 05/26/17)

Live Webinar & Audio Download $294.00

Includes Special Savings of $200.00 (through 05/26/17)

Live Webinar & DVD $294.00 plus $9.45 S&H

Includes Special Savings of $200.00 (through 05/26/17)


National Registry of CPE Sponsors

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Early Registration
Discount Deadline
May 26, 2017
(about 2 hours)

or call 1-800-926-7926

Can't Attend the Live Program?

CPE Credit

Strafford is a NASBA CPE sponsor and our live webinars qualify for CPE credits. They offer you a high quality, cost effective, and convenient CPE option, with no lost travel time or expenses.

or call 1-800-926-7926

EA Credit

Strafford is an IRS approved continuing education provider and this course is approved for 2 enrolled agent (EA) credit hours.

or call 1-800-926-7926

Customer Reviews

Offered different view points and real life, practical examples.

Angela Chretin

Northrop Grumman

The program had excellent presenters that were extremely knowledgeable.

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Legacy Professionals

I liked that the PowerPoint slides would automatically change as the speaker's presentation progressed.

Zeeshan Elahi


Real life examples that we could relate to.  Keep up the great work.

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The webinar was fast paced and comprehensive.

Lorraine Round


or call 1-800-926-7926

Corporate Tax Advisory Board

David Adler

Director of Multistate Tax Services

Deloitte Tax

Silvia Aguirre



David Bowen


Grant Thornton

Elizabeth Bowman

Tax Research Analyst

ADP Tax Credit Services

Rick Bregitzer

Manager of Domestic Taxes


Joseph Calianno

Partner, National Tax Practice

Grant Thornton

Stephanie Anne Lipinski-Galland


Williams Mullen

John Garippa

Senior Partner

Garippa Lotz & Giannuario

Joseph Geiger, Esq., CPA

Tax Consultant


Kenneth Graeber

VP & Management Consultant

Marvin F. Poer & Co.

Don Griswold

Tax Group Partner

Crowell & Moring

George Manousos



Diane Matulich

Senior Manager, Local Taxes

Advanced Micro Devices

Betty McIntosh

Director, Location Incentives Group

Cushman & Wakefield

Foy Mitchell

Vice President

Marvin F. Poer & Co.

Walter Pickhardt


Faegre & Benson

Richard Pomp

Professor of Tax Law

University of Connecticut

Richard J. Prem

Vice President, Indirect Taxes & Tax Reporting


Michael Press

Managing Principal

M.R. Press Consulting

Tammy Propst



Mark Semerad

Manager of Property Tax

Level 3 Communications

Richard Weiss

Tax Research Manager

ADP Tax Credit Services

Tom Windram

Managing Director & National Leader, Federal Tax Credits & Incentives

RSM McGladrey

Thomas Zaino

Managing Member

Zaino Hall & Farrin

or call 1-800-926-7926

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Strafford webinars are backed by our 100% Unconditional Money-Back Guarantee: if you are not satisfied with any of our products, simply let us know and get a full refund. For more information regarding complaints and refunds, please contact us at 1-800-926-7926 ext 10. Complaints regarding this program can be submitted via the course evaluation found in the “Thank you” e-mail at the end of the course.