Obtain a comprehensive review of the laws and regulations impacting S corporations. Be updated on the IRS' compliance campaign that targets the improper reporting and calculations of stock basis and distributions. Learn how to properly calculate and then report critical S corporation tax items that generate most IRS audit adjustments. Course topics cover issues such as S corporation qualifications, making and keeping the S election, reasonable compensation, taxation of distributions, the use of Qualified Subchapter S Subsidiaries, allocation of annual operating income and loss, S corporation tax reporting elections and learning the proper method to calculate the basis of stock and debt amounts.
Learning Objectives
- Identify how to form a qualified entity and elect S Corp status
- Determine how to properly allocate income and loss items to shareholders on their individual Schedule K-1.
- Calculate an S corporations' initial basis in its assets as well as a shareholder's stock and debt basis in the S corporation.
- Recognize three main reasons for calculating a shareholder's basis in an S Corp.
- Calculate annual adjustments to a shareholders' stock and debt basis and determine if losses and deductions are limited on the shareholders' individual income tax return.
- Calculate the three major taxes attributable to S corporations.
- Learn how to calculate AAA and OAA account for an S corporation.
- Understand the impact of stock redemptions on the AAA and E&P accounts.
- Review basic tax compliance requirements including all of the major S corporation entity tax elections.
Major Topics
- Discuss all new legislative, administrative, and judicial changes affecting S corporation and shareholders.
- Learn how to qualify and to make the S corporation election.
- Learn the qualifications for S corporation stock ownership.
- Understand how to calculate initial and annual stock and debt basis amounts and the three reasons why they are maintained.
- Understand the four loss limitation rules applied on the shareholder's individual income tax return (I.e., basis, at-risk, passive, and excess business loss limitations).
- Understand the proper tax treatment and reporting of a distribution from the S corporation to a shareholder.
- Learn how to calculate the three S corporation taxes.
- Learn how to calculate AAA and OAA account for an S corporation.
- Determine the impact of health insurance, the net investment income tax, qualified business income tax deduction and unreasonable compensation issues on the reporting function of the S corporation.
