Tax Planning-Buying and Selling S Corporations 2024

Overview

Buying or selling an interest in a closely held corporate business is an important transaction. CPAs must be prepared to fully consider the unique tax characteristics of an S corporation to advise their clients, whether sellers or buyers. We’ll consider buyer and seller perspectives, relevant law, tax planning opportunities, pitfalls to avoid and necessary compliance issues. Review rules related to determining the stock basis of an S corporation, treatment of suspended losses, distributions, accumulated adjustment accounts, the built-in gain tax, excess net passive income tax, allocation of income and losses related to changes in ownership of an S Corp, and tax treatment of S corporation terminations. Finally, consider different tax consequences of asset and stock sales, including Sect. 338 and 336(e) elections.

Highlights

Built-in gain tax, including planning ideas
Net excess passive income tax and planning
Liquidation of S corps, including special rules related to installment obligations
Suspended loss rules, including tax planning opportunities
Sect. 338(h)(10) and Sect. 336(e) elections
Qualified subchapter S subsidiary election (QSUB)
ESOPs
Redemption of S corporation stock, including planning opportunities
Basics of acquisitive reorganizations as applied to S corporations

Prerequisites

S Corporation experience

Designed For

CPAs

Objectives

Recognize tax considerations of selling assets of an S corporation
Determine when to use Secs. 338(g), 338(h) (10), 336(e) and qualified subchapter S subsidiary elections
Identify the allocation of taxable income or loss between the buyer and shareholder
Recognize tax considerations of selling stock of an S corporation
Identify tax planning opportunities related to the redemption of stock of S corporation
Recognize the tax consequences of an S corporation acquiring the stock of a corporation

Preparation

None

Notice

This course is offered by a 3rd party vendor. Login instructions will not be accessible in the My CPE Tracker section of the ISCPA website. Login instructions will be emailed directly to you by California Education Foundation (CalCPA).