S Corporation Stock Sales: Mastering Tax Reporting, Income/Loss Allocation and Section 1377 Elections

Utilizing "Close-the-Book" Strategies, Determining Year-End Basis Adjustments, Preparing Form 1120-S

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


Wednesday, February 15, 2017
1:00pm-2:50pm EST, 10:00am-11:50am PST

Early Registration Discount Deadline, Friday, January 27, 2017


This webinar will provide tax advisers with a comprehensive and practical guide to reporting sales of S Corporation stock in non-liquidating transactions. The panel will discuss income and loss allocation in cases of a mid-year sale, describe available elections and consent requirements for shareholders, detail when an S Corp can or must close its books under the guidance found in Section 1368, and review the treatment of accrual-basis S corporations involved in stock sales.

Description

When an S corporation stockholder sells an entire interest in an S corporation’s stock, the transaction can present significant tax reporting challenges and often undesirable tax results. S corp tax advisers need to know the various elections and provisions to mitigate the impact of income/loss allocations in the year a shareholder sells his interest in a transaction that does not liquidate the corporation.

The general S corporation rules require that income or loss must be allocated on a per-share/per-day basis among all shareholders. However, this can create inequitable tax results, particularly when the exiting shareholder sells the interest to existing shareholders.

Section 1377 provides election options to remedy potential tax issues arising from a shareholder’s sale of his interests. An S corporation may, with the consent of all shareholders, elect to “close the books” as of the date of the sale transaction for purposes of allocating income or loss to an exiting shareholder to avoid negative tax consequences.

This closing of the books election requires specific allocation and reporting calculations, and often involves year-end basis allocations to the purchasing shareholder. A thorough understanding of the Section 1377 election rules will enable tax advisers to S corporations and their shareholders to help avoid costly tax consequences.

Listen as our experienced panel provides a practical guide to the election and allocation tax challenges of reporting a shareholder’s sale of S corporation interests.

Outline

  1. General rules for income allocation on sale of S corporation stock
  2. “Closing of the Books” election under Section 1377
  3. Tax reporting after a Section 1377 election
  4. Year-end basis adjustments in the year an S corporation shareholder sells stock

Benefits

The panel will discuss these and other important topics:

  • What are the specific income/loss allocation issues that apply when an S Corporation shareholder sells his entire interest to other current shareholders?
  • What are the mechanics of making a “closing of the books” election under Section 1377?
  • Filing a Form 1120-S Tax Return after the S corporation has made a Section 1377 election
  • What basis adjustments must the S corporation make to shareholders at year-end after a Section 1377 closed taxable year election?

Learning Objectives

After completing this course, you will be able to:

  • Recognize scenarios in which an S corporation shareholder’s mid-year sale of stock interests creates inequitable or unfavorable tax consequences
  • Identify available elections under Section 1377 to change allocation of income/loss in the year of sale of a shareholder’s S corporation stock
  • Determine necessary year-end basis adjustments for buyer and remainder S corp shareholders in the year an exiting shareholder divests his S corp interests
  • Discern when a “closing of the books” election is the optimal tax strategy for S corp shareholders
  • Verify the tax reporting requirements for S corporations in the year a shareholder has sold his interests and the corporation makes a 1377 election

Faculty

Brian T. Lovett, CPA, JD, Partner
WithumSmith+Brown, New Brunswick, N.J.

Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses, including all aspects of tax compliance for partnerships and corporations. He advises clients with regard to the structure and tax consequences of new business ventures, and assists with restructuring existing businesses for increased tax efficiency. Prior to joining his firm, he was with a “Big 4” accounting firm, working closely with large, multinational real estate investment companies.

Mansoor Ansari, J.D., LL.M.
Ansari Tax Law Firm, Alpharetta, Ga.

Mr. Ansari’s practice focuses on tax law, primarily federal and state tax matters, sales tax determinations, IRS controversy, IRS debt restructuring, and IRS compliance. He has authored many articles on tax law issues. He previously practiced with a large bankruptcy law firm where he handled cases dealing with tax-debt discharge and tax-debt restructuring through Chapter 7 and Chapter 13 bankruptcy.

Robert W. Jamison, CPA, Professor Emeritus of Accounting
Indiana University, Kelley School of Business, Indianapolis

Mr. Jamison focuses on taxation of closely held businesses, principally sub-chapter S corporations and their shareholders. He also provides guidance in the areas of taxation of partnerships, limited liability companies and C corporations, as well as the owners thereof. He is a published author on tax topics, and has written extensively on S Corporations.


Registration per Person for Live Event

Additional lines for this conference can be purchased at 25% off. For orders of five or more lines, further discounts will apply and will be automatically reflected in the cart.

Live Webinar $97.00

Includes Early Discount Savings of $50.00 (through 01/27/17)

Live Webinar & CPE Processing $132.00

Includes Live Webinar Early Discount Savings of $50.00 (through 01/27/17)


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 for S-Corps and other pass-through entities; supervisory authority over other preparers/accountants. Knowledge and understanding of Section 1377, completing Form 1120-S after a Section 1377 election, and determining basis adjustments for S-Corp shareholders.

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.


Recordings

Recorded Event

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Live Webinar & Webinar Download $144.00

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Live Webinar & Audio Download $144.00

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Live Webinar & DVD $144.00 plus $9.45 S&H

Includes Special Savings of $150.00 (through 01/27/17)


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

Early Registration
Discount Deadline
January 27, 2017
(9 days)

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Customer Reviews

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Cover & Rossiter

The conference was technical, informative and presented at a good pace.

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KMH

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Savas Greene & Company

Excellent seminar! It was efficient and the important topics were covered at just the right pace; no time was wasted covering information that the participants already knew.

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Barraclough & Associates

I liked the concentration on specific issues and examples.

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Komisar Brady & Co.

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