S Corporation Tax Developments: Leveraging the Latest Law, Regulation and Guidance Changes

Recording of a 90-minute CPE webinar with Q&A


Conducted on Wednesday, August 20, 2008

Program Materials

Description

Because diversified U.S. companies often organize subsidiaries and affiliates as S corporations and other pass-through entities as a crucial element of tax planning, tax professionals must stay current on the federal laws, guidance and rulings that influence Form 1120S.

In recent years, Congress passed the Tax Relief and Health Care Act of 2006 and American Jobs Creation Act of 2004 with key provisions that have lasting impact on S corporations.

Meanwhile, the IRS has continued to issue extensive new guidance affecting S corporations. Examples of guidance topics include: converting C corporations to S corporations, using the domestic production activities deduction, and LIFO recapture through partnerships.

Listen as our panel of experienced tax advisors reviews the most meaningful recent developments involving S corporations. The speakers will offer their experiences, perspectives and practical planning strategies for your tax staff

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Outline

  1. Congressional Developments
    1. Economic Stimulus Bill of 2008
      1. Impact of increased bonus depreciation and Sect. 179 expensing
    2. Technical Corrections Act of 2007
      1. Shareholder basis limitation on losses and deductions doesn’t apply to contribution of appreciated property
    3. Small Business and Work Opportunity Act of 2007
      1. ESBT can deduct interest on debt incurred to acquire S corporation stock
      2. S corporation’s sale of stock in Qsub treated as sale of undivided interest
      3. Eliminate S corporation’s pre-1983 accumulated E&P
    4. Mortgage Forgiveness Debt Relief Act of 2007
      1. New entity-level penalty for failure to file S corporation return or include certain information
      2. Shareholders or others with material interest can inspect S corporation return
    5. Tax Relief and Health Care Act of 2006
      1. Extended use, availability and applicability of research and experimentation tax credit
      2. New guidance on domestic production activities deduction for S corporations
    6. Tax Increase Protection and Reconciliation Act of 2005
      1. S corporation shareholders who are allocated part of corporation’s qualified production activities income treated as being allocated a share of S corporation wages
    7. 2004 American Jobs Creation Act
      1. Reform S corporation taxation, including expanding permissible number of shareholders
      2. Family members treated as one shareholder
      3. Disposition of S corporation stock by qualified subchapter S trust (QSST)
  2. Relevant IRS Guidance
    1. Temporary and proposed regs simplifying S corporation and association elections
    2. Notice 2007-57 (use of S corporations with foreign entities)
    3. TD 9356 (Qsubs and single-owner eligible entities treated as disregarded entities)
    4. Revenue Ruling 2008-18 (S corporations and F reorganizations)
    5. TD 9302 (qualified and disqualified persons for S corporation ESOPs)
    6. Revenue Ruling 2008-16 (limits on shareholder’s charitable contribution deduction)
    7. Rescissions of C corporations into S corporations
    8. Final regs on LIFO recapture, inventory held by partnerships
    9. Ruling 200506007 (re-elect S corporation status after Sect. 338(h)(10) transaction
    10. Conversion of S corporation to LLC not creating separate category of stock
    11. Family shareholder election
  3. Tax Planning Possibilities
    1. S corporations and incentive equity compensation
    2. Tax implications of “check the box” and change in form of entity
    3. Implications of rescissions and transactions changing entity’s tax status
    4. Structuring S corporation loans to increase shareholder basis
  4. Updates to Form 1120S and Instructions

Benefits

The panel reviewed these and other key topics:

  • Opportunities presented by changes in key federal tax laws, regulations and guidance that affect S corporations, including the 2006 Tax Relief Act.
  • Difficult S corporation conversion topics such as built-in gains and excess passive income.
  • The latest updates to Form 1120S and its instructions.
  • Tax planning strategies, such as loan structuring and incentive equity compensation.

Faculty

Carolyn Turnbull
Carolyn Turnbull
Senior Tax Manager
Grant Thornton

She has more than 25 years of experience working with clients in the services, manufacturing, warehousing/distribution...  |  Read More

Laura Howell-Smith
Laura Howell-Smith

Director
Deloitte & Touche

She specializes in transactional and compliance issues regarding S corporations, trusts and estates. She has more than...  |  Read More

Jeanne Sullivan
Jeanne Sullivan
Senior Manager, National Tax Pass-Throughs Group
KPMG

She joined KPMG in 2006 after eight years with the IRS, working with pass-throughs and special industries as a senior...  |  Read More

Steven Goluch
Steven Goluch
Partner
Wolowicki and Associates

He specializes in closely held entities and high-net-worth individual clients. He is a member of the Illinois CPA...  |  Read More

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