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Tax Treatment of S Corp Distributions: Income and Deduction Rules, Basis, Salary vs. Income, Tax Distributions

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

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Conducted on Friday, October 4, 2024

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This CLE/CPE webinar will provide tax professionals an in-depth analysis of the tax treatment of S corporation distributions and key planning techniques for shareholders. The panelist will discuss key factors in determining the taxability of distributions of cash and property, shareholder loans, salary versus income distributions, increases and decreases of shareholder basis, and other key issues regarding the taxation of S corporation distributions.

Description

S corporations provide significant advantages to shareholders but involve careful tax planning to minimize unintended tax liability. Tax professionals often fail to recognize crucial distinctions from other pass-through entities and critical issues for distributions of cash and property to shareholders under current tax law.

Specific aspects of S corps with potentially significant tax implications include the treatment of contributing shareholder tax basis, distributions, shareholder loans, and transfers. Advisers must also consider issues regarding salary versus income distributions, Sec. 163(j) limitations, other provisions under current tax rules, and related IRS guidance.

Tax professionals must be mindful of the nuances of current tax law and the distinctions of S corporations compared to other pass-through entities.

Listen as Eric Homsi, Counsel at Crowell & Moring, examines key factors in determining the taxability of distributions of cash and property, shareholder loans, salary versus income distributions, increases and decreases of shareholder basis, and other key issues regarding the taxation of S corporation distributions.

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Outline

  1. Tax challenges of S corporations
  2. Recent regulations and IRS guidance
  3. IRC Section 163(j)
  4. Distributions and transfers of interest

Benefits

The panelist will review these and other key issues:

  • What are the critical tax challenges of S corporations under current tax law?
  • What issues arise for cash and property distributions and transfers of interest?
  • What is the impact of Sec. 163(j) limitations?
  • When selling equity interest in an S corporation, what are the pitfalls?

Faculty

Homsi, Eric
Eric Homsi

Counsel
Crowell & Moring

Mr. Homsi is a counsel in the firm's Tax Group, resident in the New York office. His practice concentrates...  |  Read More

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