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PPC's 1120S Deskbook

PPC's 1120S Deskbook

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  • Frequency of Updates:
    Annually with one Supplement (as needed)
  • Brand:
    Practitioners Publishing

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Book
Product Code:
T2SP
$275.00
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T2SQ
$295.00
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T2SR
$275.00
eBook - ProView
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T2SV2014
$275.00
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Given the IRS's renewed interest in examining pass-through returns and emphasis on practitioner due diligence, proper preparation of your clients' returns is more important than ever. With the key issues, examples, filled-in Schedule K-1s and other forms, checklists, worksheets, and other quality control tools in the Deskbook, you and your staff can solve the difficult or unclear issues encountered when preparing Form1120S and the related forms and schedules, as well as Forms 2553 (S election form) and 8869 (QSub election form). The Deskbook points out elections and other tax-saving opportunities while preparing the return; plus, the tax planning roadmaps highlight planning opportunities that you and your staff can pursue after busy season.

Learn More

The 2014 tax year print and ProView eBook editions will be available in December 2014. You can pre-order your edition today.

The IRS is ratcheting up enforcement efforts against S corporations, due to their increasing popularity. It's also focusing on return preparer missteps as a cost-effective way of reducing the tax gap. To keep your clients out of hot water, and to enable you and your staff to work efficiently and profitably, PPC's 1120S Deskbook provides:

  • A quality control template that guides you through a series of return preparation checklists, computational worksheets, sample elections and other practice tools that promote due diligence in the preparation and review of S corporation returns.
  • Sample filled-in K-1s that provide the updated lines and codes for reporting various pass-through items to the shareholders, which will help your clients avoid matching problems with the IRS.
  • Guidance on reporting (and minimizing) the net investment income tax (NIIT) on various types of S corporation transactions and pass-through items, including the general and simplified methods of computing the NIIT due upon a sale of S stock.
  • Expanded coverage of the final tangible property regulations, with an emphasis on the favorable elections that can be made on Form 1120S and the accounting method changes that will be automatically approved by the IRS (some of which are eligible for simplified Form 3115 reporting).
  • Updated discussion of the final regulations governing a shareholder’s basis in debt. Now, if debt is bona fide, the shareholder obtains debt basis without satisfying the actual economic outlay doctrine that was previously required.
  • Post-year-end elections that can benefit the shareholders, such as electing specific accounting upon a complete stock disposition, or electing to distribute earning and profits to protect the corporation's S election and avoid future taxation of distributions as dividends.

As in past years, the Deskbook includes valuable tax practice tools, including a tax return preparation engagement letter, client organizer, due diligence checklist, long and short form return preparation checklists, and first year and final year return preparation checklists. In addition, the tax planning roadmaps provide a quick and easy way of identifying post-busy season planning opportunities by reviewing your clients’ completed tax returns.

List of Content (Click any title to expand the list)

  • INTRODUCTORY MATERIAL
    • ABOUT THE AUTHORS. . .
    • LIST OF SUBSTANTIVE CHANGES AND ADDITIONS
  • INITIAL S YEAR
    • Chapter 1: Eligibility
      • Introduction
      • KEY ISSUE 1A Meeting the S Corporation Eligibility Requirements.
        • Eligibility Requirements
        • Ineligible Shareholders
        • Number of Shareholders
        • Beneficial Owner of Stock Is Considered the Shareholder
        • Domestic Corporation Requirement
        • Ineligible Corporations
        • Reelecting S Status after Termination of the S Election
        • Other Qualification Issues
        • Using a Checklist to Ensure S Corporation Eligibility
        • Advantages and Disadvantages of S Status
      • KEY ISSUE 1B Identifying Trusts and Estates Qualified to Hold S Corporation Stock.
        • Estates
        • Trusts
        • Testamentary Trusts
        • Only Certain Trusts Are Allowed to Name Successive Beneficiaries
        • Qualified Subchapter S Trusts
        • Relief from Missed QSST Election
        • Electing Small Business Trusts
        • Relief from Inadvertent Termination Due to Failure to File ESBT Election
        • A Testamentary Trust's ESBT or QSST Election Can Preserve S Corporation Status
        • Converting from One Type of Eligible Trust (QSST or ESBT) to the Other
        • Qualified Retirement Plan Trusts
      • KEY ISSUE 1C Treating Family Members as One Shareholder.
        • Treating a Family Group as One Shareholder
        • Identifying Family Members
        • Husband and Wife
        • Counting Shareholders When Shareholders Are Divorced
        • Exceeding the Shareholder Limit Causes S Election to Terminate
        • Shareholder Estate
      • KEY ISSUE 1D Qualified Retirement Plan Trusts.
        • Qualified Retirement Plans
        • Employee Stock Ownership Plans (ESOPs)
        • Individual Retirement Accounts
      • KEY ISSUE 1E Handling a Partnership with S Corporations as Partners.
        • An S Corporation Can Own an Interest in a Partnership
        • Tiered Structures
      • KEY ISSUE 1F Using a Limited Liability Company with an S Corporation.
        • LLCs May Elect to Be Treated as Corporations and May Elect S Status.
        • A Single-member LLC Can Hold S Corporation Stock
        • An S Corporation Can Own an Interest in an LLC
        • Changing from S Corporation to LLC
      • KEY ISSUE 1G Making the Qualified Subchapter S Subsidiary Election.
        • A Corporation's S Election Terminates When Its Shares Are Acquired by Another Corporation
        • Qualified Subchapter S Subsidiaries
      • KEY ISSUE 1H Electing S Status for Certain Banks.
        • Banks Not Using the Reserve Method for Bad Debts Can Elect S Status
        • Automatic Accounting Change Procedure
        • Restricted Bank Director Shares
        • Other Considerations for Banks
      • KEY ISSUE 1I Meeting the One-class-of-stock Requirement.
        • Governing Provisions
        • Stock versus Debt in an S Corporation
        • Debt as a Second Class of Stock
        • Disproportionate Distributions to Shareholders
        • Employment Agreements and Other Commercial Contractual Agreements
        • Shares Taken into Account
        • Shareholder Buy/Sell Agreements and Redemption Agreements
        • Options and Warrants
        • Compensation in the Form of Stock and Other Employee Incentive Plans
        • Nonqualified Deferred Compensation Plans
        • Effective Date of One-class-of-stock Regulations
        • Availability of Inadvertent Termination Relief
      • ILLUSTRATION 1-1: Sample QSST Election
      • ILLUSTRATION 1-2: Successive Income Beneficiary's Affirmative Refusal to Consent to a QSST Election
      • ILLUSTRATION 1-3: Sample ESBT Election
    • Chapter 2: Filing and Repairing the S Election
      • Introduction
      • KEY ISSUE 2A Filing the S Election on Form 2553.
        • Form 2553
        • S Election Remains in Effect until Terminated
        • When S Election Form Is Filed
        • Existing Corporations
        • Newly Formed Corporations
        • The S Election Is Made on Form 2553
        • Sample Form 2553
        • Persons Required to Consent to the S Election
        • Obtaining Relief from Omitted Consent of Community Property Spouse
        • Beneficial Owner
        • Family Members
        • Shareholders Acquiring Stock after the S Election Is Filed
        • Deadline for Filing Shareholder Consents Can Be Extended
        • Filing the S Election by Mail, Private Delivery Service, or Fax
        • Where Form 2553 Is Filed
        • Filing the S Election by Delivering It to an IRS Taxpayer Assistance Center
        • Practitioners Should Follow Up with IRS, If Necessary
        • Consequences If Form 2553 Is Not Properly Filed
        • S Election May Be Revoked before It Becomes Effective
        • IRS Guidance for Filing Form 2553
      • KEY ISSUE 2B Determining When the Initial Tax Year Begins.
        • Beginning of First Year Tax Year for Newly Formed Corporation Electing S Status
        • Beginning of First Tax Year for C Corporation Electing S Status
        • Changing the C Corporation's Year before Electing S Status
        • Selecting the Initial Tax Year
      • KEY ISSUE 2C Repairing a Late or Invalid S Election.
        • Waiver of Invalid S Election
        • Methods of Obtaining Relief from a Late or Invalid S Election
        • Failure to Obtain Shareholder Consents
        • Relief for Late Election under Rev. Proc. 2007-62
        • Relief for Late Election under Rev. Proc. 2003-43
        • Relief for Late Election under Rev. Proc. 97-48
        • Requesting a Letter Ruling to Waive the Effect of an Invalid Election
        • User Fee
        • Minor Errors Do Not Invalidate the S Election
        • Closing the First C Year of a Newly Formed Corporation to File a Timely S Election
        • IRS Guidance for Filing Form 2553
      • KEY ISSUE 2D Admitting a New Shareholder to S Corporation.
        • Stock Basis
        • Pass-through of S Corporation Items
      • KEY ISSUE 2E Eligible LLC Can Elect S Status.
        • Classifying LLC as a Corporation Can Be Section 351 Transfer
        • Eligible LLC Electing Treatment as a Corporation Can Elect S Status
        • Filing Form 2553 When an LLC Elects S Status
        • Relief Provisions When Form 2553 or Form 8832 Are Not Timely Filed
        • Electing S Status by LLC Treated as Partnership
        • LLC Converting to S Status Must Conform to S Corporation Rules
      • ILLUSTRATION 2-1: Shareholder and Spousal Consents to S Election
      • ILLUSTRATION 2-2: Request for Extension of Time to Obtain Shareholder's Consent to S Election
      • ILLUSTRATION 2-3: Request for Extension to Submit Omitted Shareholders' Consents to S Election
    • Chapter 3: Incorporation and Capitalization
      • Introduction
      • KEY ISSUE 3A Incorporating Tax-free under IRC Section 351.
        • Section 351 Requirements
        • Transfers of Money or Other Property (Boot)
        • Loss Is Not Recognized
        • Assumption of Liabilities
        • Characterization of Gain Recognized
        • Basis to Transferor and Transferee
        • Holding Period
        • Bankruptcy and Investment Company Exceptions to the Nonrecognition Rule
        • Section 351 Transfers to an Existing Corporation
        • Expenditures Paid to Facilitate a Section 351 Transfer Are Capitalized
      • KEY ISSUE 3B Incorporating a Proprietorship or Partnership and Electing S Status.
        • Accounts Receivable and Payable Assumed by Corporation
        • Cash-basis Accounts Receivable and Payable Assumed by an Accrual-basis Corporation
        • Basis of Stock and Property Received by Shareholder
        • Allocation of Transferor Shareholder's Basis and Holding Period
        • Corporate Basis of Transferred Assets
        • Incorporating a Partnership
        • Avoiding Abusive Tax Shelter Transactions
      • KEY ISSUE 3C Incorporating in a Taxable Transaction.
        • Incorporation May Be Taxable
        • Sales Recharacterized as Tax-free Transfers
      • KEY ISSUE 3D Determining Basis of Transferred and Imported Built-in Loss Property.
        • Transferred Built-in Loss
        • Electing to Apply Basis Limitation to the Transferor's Stock Basis
        • Imported Built-in Loss
      • KEY ISSUE 3E Avoiding Treatment of Stock as Debt in an S Corporation.
      • KEY ISSUE 3F Avoiding Recapture of Business Credits.
      • KEY ISSUE 3G Filing the Initial S Corporation Tax Return, Form 1120S.
        • Due Diligence and Preparation Checklists
      • ILLUSTRATION 3-1: Transferor's Disclosure Statement in a Tax-free Incorporation
      • ILLUSTRATION 3-2: Transferee's Disclosure Statement in a Tax-free Incorporation
      • ILLUSTRATION 3-3: Computing Recognized Gain and Distributee Shareholder Basis in a Section 351 Incorporation
    • Chapter 4: Organizational and Start-up Expenses (Preopening Expenses)
      • Introduction
      • KEY ISSUE 4A Understanding the Tax Treatment of Organizational Expenses.
        • Limited Deduction for Organizational Expenses
        • Corporate Organizational Expenses
        • Deemed Election to Deduct and Amortize Organizational Expenditures
        • Electing to Forgo the Deemed Election
        • Elections Are Irrevocable
        • Change in Method of Accounting
        • Commonly Encountered Organizational Expenditures
        • Expenditures That Do Not Qualify
        • Cash-basis Corporations
        • When Does a Corporation's Business Begin?
        • Presentation of Amortization Expense on Form 1120S
        • Treatment of Unamortized Organizational Costs When S Corporation Liquidates
      • KEY ISSUE 4B Understanding the Tax Treatment of Start-up Expenses.
        • Limited Deduction for Start-up Expenses
        • Defining the Start-up Period
        • Identifying New Business Activity
        • Investigatory Expenses
        • Start-up Expenses of an Investment Activity
        • Deemed Election to Deduct and Amortize Start-up Expenditures
        • Electing to Forgo the Deemed Election
        • Elections Are Irrevocable
        • Change in Method of Accounting
        • Presentation of Amortization Expense on Form 1120S
        • Disposing of a Trade or Business with Unamortized Start-up Expenditures
        • Using an S Corporation to Investigate a New Business
      • KEY ISSUE 4C Distinguishing Organizational and Start-up Expenses from Other Nondeductible Preopening Expenditures.
        • Asset Acquisition Costs
        • Significant Long-term Benefits
        • Construction Costs
      • ILLUSTRATION 4-1: Sample Filled-in Form 4562 Showing Amortization of Organizational Expenditures
      • ILLUSTRATION 4-2: Sample Filled in Form 4562 Showing Amortization of Start-up Costs
    • Chapter 5: Hidden Traps
      • Introduction
      • KEY ISSUE 5A Establishing Initial Shareholder Stock and Debt Basis.
        • Importance of the Initial Stock and Debt Basis Calculation
        • Initial Stock Basis
        • Initial Debt Basis
      • KEY ISSUE 5B Valuing Date-of-conversion Assets for Built-in Gains Tax Purposes.
        • Inventory
        • Cash Method Accounts Receivable
        • Goodwill and Intangible Assets
      • KEY ISSUE 5C Recapturing LIFO When a C Corporation Elects S Status.
      • KEY ISSUE 5D Carrying Over Losses and Credits from C Corporation Tax Years.
        • Carryovers
        • Counting Carryover Years
        • Net Operating Losses
        • Tax Credits
        • Impact of Ownership Changes
        • Passive Activity Losses
        • Section 179
      • KEY ISSUE 5E Carrying Over Losses When Stock Is Transferred to a Spouse or Former Spouse.
      • KEY ISSUE 5F Reducing Tax Preference Items.
      • KEY ISSUE 5G Computing Taxable Income as if the Corporation Were a C Corporation.
        • Determining When the Computation Is Required
        • Identifying Potential Adjustments
      • KEY ISSUE 5H Nonqualified Equity Plans Involving Actual Stock.
      • KEY ISSUE 5I Providing Fringe Benefits to S Shareholders.
      • KEY ISSUE 5J Post-year-end Elections That Can Benefit the Shareholders.
  • ORDINARY INCOME
    • Chapter 6: Trade or Business Income
      • Introduction
      • KEY ISSUE 6A Tracking and Reporting Income by Activity.
      • KEY ISSUE 6B Reporting Sales and Revenue from Operations.
        • Merchant Card and Third-party Network Receipts and Sales
        • Cash Method of Accounting and the Constructive Receipts Doctrine
        • Inventories and the Accrual Method of Accounting
        • All-events Test
        • Income from Long-term Contracts
        • Advance Payments
        • Multi-year Service Warranty Income
        • Prepaid Inventory Sales
        • Advance Trade Discounts
        • Returns and Allowances
      • KEY ISSUE 6C Reporting Dealer Income from Certain Installment Sales.
      • KEY ISSUE 6D Reporting a Hobby Activity Conducted through an S Corporation.
        • Hobby Loss Rules Apply to S Corporations
        • Applying the Rules
        • Ordering Rules for Claiming Deductions
        • Safe Harbor Rule Helps Eliminate Uncertainty
        • Filing Form 5213 to Postpone the Safe Harbor Determination
        • Form 5213 Extends the Statute of Limitations
    • Chapter 7: Cost of Goods Sold
      • Introduction
      • KEY ISSUE 7A Recognizing the Methods for Valuing Inventory.
        • When Inventories Are Required
        • Accrual Method of Accounting
        • Small Taxpayer Exceptions
        • What Is Included in Inventory
        • Tax versus Accounting Rules
        • Cost and Lower of Cost or Market Methods
        • Inventory Write-downs
        • Shrinkage Estimates
        • Alternate Inventory Valuation Methods
      • KEY ISSUE 7B Electing and Revoking the LIFO Method.
        • LIFO Method
        • LIFO Election
        • Section 472(d) Adjustment
        • Revocation of LIFO Method
        • LIFO Recapture When a C Corporation Elects S Status
        • LIFO Method Is Incompatible with IFRS
      • KEY ISSUE 7C Capitalizing Inventory Costs under the UNICAP Rules (IRC Sec. 263A).
      • KEY ISSUE 7D Computing Cost of Goods Sold (Form 1125-A).
        • Form 1125-A
        • Completing Form 1125-A
        • Reporting Materials and Supplies under the Small Taxpayer Exception
      • KEY ISSUE 7E Other Inventory Issues.
        • Built-in Gains Tax
        • Contributions of Food Inventory
        • Withdrawal of Inventory for Personal Use
      • ILLUSTRATION 7-1: Electing to Use LIFO Inventory Method
      • ILLUSTRATION 7-2: Cost of Goods Sold Calculation for Taxpayer Using Cost Method and FIFO
      • ILLUSTRATION 7-3: Reporting Deductible Materials and Supplies under the Small Taxpayer Exception
    • Chapter 8: Nonbusiness Income
      • Introduction
      • KEY ISSUE 8A Reporting Portfolio Income on Schedule K-1.
      • KEY ISSUE 8B Separately Stating Tax-exempt Income.
      • KEY ISSUE 8C Reviewing Life Insurance Proceeds.
      • KEY ISSUE 8D Reviewing the Potential Traps from Passive Investment Income.
      • KEY ISSUE 8E Reviewing the PAL Rules Relating to Rental Income.
        • PAL Relief for Active Participation in Real Estate Rentals
        • PAL Relief for Participation in Real Property Trades or Businesses
        • Passive Investment Income
      • KEY ISSUE 8F Hobby Income.
      • KEY ISSUE 8G Reporting Payments Made in the Course of Certain Rental Real Estate Activities.
        • Reporting Requirement
        • Expanded Reporting Repealed
      • ILLUSTRATION 8-1: Items of Tax-free Income
  • ASSET DISPOSITIONS
    • Chapter 9: Installment Sales and Like-kind Exchanges
      • Introduction
      • KEY ISSUE 9A Understanding Installment Sales--General Rules and Limitations.
        • Installment Sales
        • Installment Reporting
        • Reporting Installment Gain on Schedule D and Form 4797
      • KEY ISSUE 9B Installment Sales Cannot Be Used to Avoid the Built-in Gains Tax.
      • KEY ISSUE 9C Reporting Installment Sales to Related Parties.
        • Sales to Related Parties
        • Depreciable Property Rule
        • Resale Rule
      • KEY ISSUE 9D Applying the Interest-charge on Installment Receivables over $5 Million.
      • KEY ISSUE 9E Reporting Dealer Income from Certain Installment Sales.
        • Dealer Dispositions
        • Property Used or Produced in Farming Business
        • Residential Lots and Timeshares
      • KEY ISSUE 9F Electing Out of Installment Reporting.
        • Corporate-level Election
        • When to Consider Making the Election Out of Installment Reporting
      • KEY ISSUE 9G Repossessing Property Sold on Installment Basis.
      • KEY ISSUE 9H Disposing of Installment Obligations.
        • Taxable Dispositions
        • Special Rules for Distributions in Liquidations
        • Character of Gain
      • KEY ISSUE 9I Recognizing Installment Sales with Insufficient Interest.
      • KEY ISSUE 9J Understanding Like-kind Exchanges--General Rules.
        • Like-kind Property
        • Effect of Boot on Exchange
        • Basis of Property Received in a Like-kind Exchange
        • Depreciation
        • Holding Period
        • Reporting Like-kind Exchanges
        • Related-party Exchanges
        • Built-in Gains
      • KEY ISSUE 9K Reporting Like-kind Exchanges of Personal Property.
        • General Nonrecognition Rules for Personal Property
        • Depreciable Tangible Personal Property
        • Intangible Personal Property and Nondepreciable Personal Property
      • KEY ISSUE 9L Understanding Exchanges of Multiple Properties.
      • KEY ISSUE 9M Understanding Deferred Exchanges.
        • Primary Requirements for Deferred Exchanges
        • Safe Harbor Security Arrangements
        • Reverse Like-kind Exchanges
        • Multiple-party Exchanges
      • ILLUSTRATION 9-1: Reporting Related-party Installment Sales
      • ILLUSTRATION 9-2: Gain on Like-kind Exchange and Basis of Property Received
      • ILLUSTRATION 9-3: Sample Filled-in Form 8824 for Like-kind Exchange
      • ILLUSTRATION 9-4: Reporting Related Party Disposition of Property on Form 8824
    • Chapter 10: Trade or Business Property Transactions
      • Introduction
      • KEY ISSUE 10A Applying the Capital Gains Tax Rules.
        • Two Categories of Pass-through Items
        • Capital Gains
        • Collectibles Gain
        • Qualified Small Business Corporation Stock
        • Specialized Small Business Investment Companies
      • KEY ISSUE 10B Deferring Gain on Involuntary Conversions.
        • Involuntary Conversion Gains and Losses
        • Definition of Similar Property
        • Replacement Period
        • Obtaining an Extension of the Replacement Period
        • Reporting Gain When Converted Property Is Not Replaced within Allowable Period
        • Special Like-kind Rule for Condemned Real Property
        • Replacement Property in Disaster Areas
        • Related Parties
      • KEY ISSUE 10C Reporting Casualty and Theft Losses of Business Property.
        • Casualty Losses
        • Theft Losses
        • Deducting a Casualty or Theft Loss
        • Insurance Proceeds or Other Reimbursements
        • When to Report Casualty and Theft Losses
        • Election to Report Declared Disaster Losses in Prior Year
        • Taxpayers Experiencing Financial Loss
        • Fraudulent Investment Schemes
        • Passive Activities
        • Section 1231 Gains and Losses
        • Business Property Partly Used for Personal Purposes
      • KEY ISSUE 10D Deducting Qualified Disaster Expenses.
      • KEY ISSUE 10E Understanding Abandonments of Business Property.
        • Abandonment Losses
        • Reporting an Abandonment Loss
        • Transaction with Shareholder Treated as a Sale Rather Than an Abandonment
      • KEY ISSUE 10F Computing Depreciation Recapture.
        • Depreciation Recapture
        • Disposition of Multiple Properties in the Same Transaction
      • KEY ISSUE 10G Determining Gain from Disposition of Certain Natural Resource Property or Stock of an S Corporation That Owns Such Property.
        • Disposition of Natural Resource Property
        • Disposition of Stock in an S Corporation
      • KEY ISSUE 10H Understanding Nonrecaptured Section 1231 Loss Carryovers.
      • KEY ISSUE 10I Applying the Basis Limitations on Imported and Transferred Built-in Loss Property.
        • Imported Built-in Loss Property
        • Transferred Built-in Loss Property
      • KEY ISSUE 10J Allocating the Purchase Price When a Business Is Bought or Sold.
        • Section 1060 Allocation Rules
        • Assets That Constitute a Trade or Business
        • Procedure for Allocation of Purchase Price
        • Reporting Requirements
      • ILLUSTRATION 10-1: Completed Form 4684 Reporting a Business Casualty Loss
      • ILLUSTRATION 10-2: Completed Form 4797 Reporting an Abandonment Loss
      • ILLUSTRATION 10-3: Sample Filled-in Form 8594 for Allocation of Assets
    • Chapter 11: Debt Discharge Income and Foreclosures
      • Introduction
      • KEY ISSUE 11A Understanding the Debt Discharge Income Rules for Solvent S Corporations.
        • Taxable Debt Discharge Income
        • New Debt Instrument Issued in Satisfaction of an Existing Debt
        • Acquisition of Debt by a Related Party
        • Stock Issued for Debt
      • KEY ISSUE 11B Understanding the Debt Discharge Income Rules for Bankrupt or Insolvent S Corporations.
        • Special Rules for Bankrupt or Insolvent Taxpayers
        • Understanding the Effects of Filing a Bankruptcy Petition
        • Amount Excludable from Gross Income
        • Calculating Insolvency When the Taxpayer Has Nonrecourse Debt
        • Reduction of Tax Attributes
        • Basis Reduction Elections
        • Ordering Rules for Basis Reduction
        • Overall Attribute Reduction Limitation
        • Timing of Attribute Reduction
        • Stock Issued for Debt
      • KEY ISSUE 11C Applying the Special Debt Discharge Income Rules for Real Property Business Debt.
        • Election Required
        • Basis Reduction
        • Limitations
        • Reporting
      • KEY ISSUE 11D Applying the Special Debt Discharge Income Rules for Qualified Farm Indebtedness.
      • KEY ISSUE 11E Reducing Purchase Money Debt.
      • KEY ISSUE 11F Applying the Rules to Shareholder Loans to S Corporations on Repayment, Contribution to Capital, or Exchange for Stock.
      • KEY ISSUE 11G Understanding Foreclosure by Lender Involving Recourse Debt.
        • Foreclosure or Deed in Lieu of Foreclosure
        • Qualified Real Property Business Debt Election
      • KEY ISSUE 11H Understanding Foreclosure by Lender Involving Nonrecourse Debt.
      • KEY ISSUE 11I Electing to Defer and Ratably Recognize Income from Debt Reacquisition.
        • Election to Defer Recognition of COD Income
        • Effect of the Election
        • Applicable Debt Instruments
        • Eligible Debt Reacquisition Transactions
        • Allocation of Deferred COD Income to Shareholders
        • Making the Election
        • Annual Information Statements
        • Basis Adjustments
        • Accumulated Adjustments Account
        • Practical Considerations
      • KEY ISSUE 11J Reporting Debt Discharges on Forms 982 and 1099-C.
        • Form 982
        • Form 1099-C
      • ILLUSTRATION 11-1: Election to Exclude Income from Discharge of Qualified Real Property Business Debt
  • DEDUCTIONS
    • Chapter 12: Compensation
      • Introduction
      • KEY ISSUE 12A Deducting "Reasonable" Officer and Employee Compensation.
        • Compensation Must Be Reasonable
        • Compensation for Shareholder-employee's Services Is Wages
        • Factors for Determining Reasonable Salaries
        • Increasing or Reducing Salaries for Tax-savings Purposes
        • Paying a Year-end Bonus
        • Making Up for Prior Year Undercompensation
        • Compensating Professionals in a Professional Services Firm
        • IRS Enforcement of Adequate Shareholder Compensation
        • Setting and Supporting Reasonable Compensation
        • Noncash Compensation
        • Reporting Compensation on Form 1120S
      • KEY ISSUE 12B Reclassifying Compensation Disguised as Distributions or Other Payments.
        • Shareholder-officers of an S Corporation Are Employees
        • Compensation Disguised as Distributions
        • Consequences of Failing to Withhold and Remit Income and Employment Taxes
        • Employment Contract Does Not Avoid Reasonable Salary Requirement
        • Distributions to Corporate Officers May Be Wages
        • Compensation Disguised as Loans to Shareholders
        • Compensation for Services Is Not Self-employment Income
        • IRS Guidance on Reasonableness of Compensation
      • KEY ISSUE 12C Deducting Accrued Shareholder Compensation under the Matching Principle.
      • KEY ISSUE 12D Paying Compensation in the Form of Stock and Other Employee Incentive Plans.
        • Issuing Stock to Compensate Employees
        • Unrestricted Stock
        • Restricted Stock
        • Stock Options
        • Deferred Compensation Plans
      • KEY ISSUE 12E Denying Independent Contractor Treatment to Shareholder-officer.
      • KEY ISSUE 12F Temporary Tax Credit for Wages Paid to Certain Employees.
      • KEY ISSUE 12G FICA Tax Reduction for Employees in 2011.
      • ILLUSTRATION 12-1: Employee's Election to Treat Receipt of Restricted Stock as Current Compensation
    • Chapter 13: Bad Debt Losses
      • Introduction
      • KEY ISSUE 13A Understanding Business versus Nonbusiness Bad Debts.
        • Two Classes of Bad Debt Losses
        • Tax Return Presentation
      • KEY ISSUE 13B Determining the Amount and Timing of a Bad Debt Deduction.
        • Amount and Timing
        • Specific Charge-off Method
        • Statute of Limitations
      • KEY ISSUE 13C Loaning Funds to Shareholders and Related Parties.
        • Bad Debts
        • Bona Fide Debt
        • Loans Payable to and Receivable from a Shareholder
      • KEY ISSUE 13D Claiming a Bad Debt Deduction when an S Corporation Acts as a Guarantor.
        • S Corporation Acting as Guarantor
        • Right of Subrogation
      • KEY ISSUE 13E Applying the Nonaccrual-experience Method for Service Providers.
        • Nonaccrual-experience Method
        • Safe Harbors
        • Periodic Systems
    • Chapter 14: Taxes and Interest
      • Introduction
      • KEY ISSUE 14A Deducting Taxes and Interest.
        • Deducting Taxes
        • Deducting S Corporation Taxes
        • Deducting Payroll Taxes
        • Identifying Taxes That Are Not Deductible
        • Deducting Interest
        • Deducting Interest on S Corporation Tax Deficiencies
        • Identifying Interest That Is Not Deductible
        • Deducting Prepaid Expenses
      • KEY ISSUE 14B Deducting Real Property Taxes.
        • Economic Performance Rule
        • Recurring Item Exception Election
        • Ratable Accrual Election
        • Apportioning Real Property Taxes between Buyer and Seller
      • KEY ISSUE 14C Deducting State Income Taxes Incurred by S Corporations.
        • State Recognition of Federal S Election
        • Corporate-level Tax
        • Payments on Behalf of Shareholders
      • KEY ISSUE 14D Capitalizing Certain Taxes.
        • Sales Taxes
        • Assessments for Local Benefits
        • UNICAP Rules
        • Election to Capitalize
      • KEY ISSUE 14E Applying the Interest Tracing Rules.
        • Debt Proceeds Are Traced to Determine Character of Interest Expense
        • Debt Proceeds Used to Pay Interest
        • Temporary Regulations
      • KEY ISSUE 14F Deducting Interest Incurred to Purchase Stock or Inject Capital into an S Corporation.
        • Debt Incurred to Inject Capital into an S Corporation
        • Debt Incurred to Finance the Purchase of S Stock
        • Effect of Applying the Debt Allocation Procedure
        • Interest Allocable to a Trade or Business Activity
        • Debt Attributable to Former S Corporation
        • Trade or Business Deduction for Interest Paid by Shareholder
        • Passive Activity Loss Rules
      • KEY ISSUE 14G Making Debt-financed Distributions to Shareholders.
      • KEY ISSUE 14H Reporting Investment Interest.
        • Investment Interest Expense
        • Reporting on Schedules K and K-1
      • KEY ISSUE 14I Capitalizing Certain Interest Expense.
        • Requirement to Capitalize Interest
        • Designated Property
        • Avoided-cost Method
      • KEY ISSUE 14J Calculating Forgone Interest on Below-market Shareholder Loans to S Corporations.
        • Corporation/shareholder Below-market-interest Loans
        • Use a Three-step Process to Apply the Below-market-interest Loan Rules
        • STEP 1 Determine If the Transaction Produces a Below-market Loan
        • STEP 2 Calculate the Amount of Forgone Interest
        • STEP 3 Determine the Character and Timing of the Deemed Transfers
        • Imputed Interest May or May Not Be a Wash
        • Reporting Requirements
        • Deductibility of Interest on Below-market Corporation/shareholder Loans
        • Summary
      • KEY ISSUE 14K Interest Paid by Shareholders or Corporation on S Corporation Tax Deficiencies.
      • ILLUSTRATION 14-1: Shareholder's Schedule E Reporting Interest Expense Allocable to the Purchase of S Stock
      • ILLUSTRATION 14-2: Shareholder's Schedule E Reporting Interest Expense Allocable to an Investment in a Passive Activity
      • ILLUSTRATION 14-3: Interest Expense on Debt-financed Distributions
      • ILLUSTRATION 14-4: Investment Interest Expense and Related Items
      • ILLUSTRATION 14-5: Shareholder Capitalization of Pass-through Interest
    • Chapter 15: Depreciation and Depletion
      • Introduction
      • KEY ISSUE 15A Electing a Depreciation Method.
        • Determining Allowable Depreciation Deduction
        • Special Recovery Periods for Certain Assets
        • Listed Property
        • Filing Form 4562
        • AMT Adjustment
        • Depreciating Leasehold Improvements and Restaurant Property
        • Using Capitalization Floor for Lower-priced Assets
        • Capitalization of Tangible Assets
        • Expensing Costs to Remove Architectural Barriers
        • Depreciating Real Estate
        • Mid-month, Half-year, and Mid-quarter Conventions
        • Depreciation in Year of Acquisition or Disposition.
        • MACRS Property Acquired in a Like-kind Exchange or as a Result of an Involuntary Conversion
        • Converting Personal Use Property to Business Use Property, and Vice Versa
      • KEY ISSUE 15B Claiming First-year Bonus Depreciation.
        • Identifying Qualified Property
        • Only New Assets Are Eligible
        • Acquisition Date Must Be within Applicable Period
        • Placed-in-service Deadline
        • Reporting Bonus Depreciation
        • Coordination with Other Depreciation Rules
        • Electing Out of Bonus Depreciation
      • KEY ISSUE 15C Deducting Depreciation in Short Tax Years.
      • KEY ISSUE 15D Depreciating Automobiles.
        • Automobiles, Trucks, and Vans
        • Section 179 Limitation on SUVs
        • Depreciation Limits
        • Qualified Business Use
        • Reporting Depreciation on Form 4562
        • Corporate Deduction for Employer-provided Autos
        • Like-kind Exchanges of Autos
      • KEY ISSUE 15E Claiming the Section 179 Deduction at S Corporation Level.
        • Eligibility Requirements
        • Compared with Bonus Depreciation
        • The Dollar Limitation
        • Section 179 Deduction for Real Property
        • The Property-placed-in-service Limitation
        • Fiscal-year Issue
        • The Taxable Income Limitation
        • Carrying Over Deductions Exceeding Taxable Income Limit
        • Apportionment of Section 179 Limitations among Members of a Controlled Group
        • Mid-quarter Convention
        • Making and Revoking the Section 179 Election
        • Recapture of the Section 179 Deduction
      • KEY ISSUE 15F Applying the Percentage Depletion Limitations.
        • Percentage Depletion for Marginal Properties
        • Property-by-property Reporting
        • Reporting Oil and Gas Operations to S Shareholders
      • KEY ISSUE 15G Capitalizing and Amortizing Intangible Assets.
        • Requirement to Capitalize
        • Amortization of Purchased Intangibles under Section 197
        • Section 197 Intangible Defined
        • Reporting Amortization Expense
        • Disposition of Section 197 Intangibles
      • KEY ISSUE 15H Correcting Overstated or Understated Depreciation and Amortization Deductions.
      • ILLUSTRATION 15-1: Schedule K-1 and Form 4797 Reporting Disposition of Property with Section 179 Recapture
      • ILLUSTRATION 15-2: Completed Form 4562 Showing Auto Depreciation
      • ILLUSTRATION 15-3: Completed Form 4562 Showing Section 179 Deduction and Bonus Depreciation
      • ILLUSTRATION 15-4: Completed Form 4562 Showing Amortization of Section 197 Assets
      • ILLUSTRATION 15-5: Comparing Bonus Depreciation and Section 179 Deduction
    • Chapter 16: Fringe Benefits and Retirement Plans
      • Introduction
      • KEY ISSUE 16A Deducting Taxable and Nontaxable Fringe Benefits.
        • Compensation Must Be Reasonable
        • 2% Shareholder Rule
        • Nontaxable Fringe Benefits
        • Tax Treatment of Nontaxable Fringe Benefits
        • Section 132 (Statutory) Fringe Benefits
        • Reporting Nontaxable Fringe Benefits
        • Taxable Fringe Benefits
        • Tax Treatment of Taxable Fringe Benefits
        • Payroll Taxes and Federal Income Tax Withholding
        • Reporting Taxable Fringe Benefits
        • Summary of Partner versus Employee Treatment
        • Valuing and Deducting Taxable Noncash Fringe Benefits
        • Special Accounting Rule for Taxable Noncash Fringe Benefits
        • Failing the Nondiscrimination Requirements
        • Other Issues
      • KEY ISSUE 16B Deducting Self-employed Medical Insurance for S Shareholders.
        • Deduction Allowed
        • Earned Income Limitation
        • Family Attribution Rules
        • IRS Guidance on Deducting Health Insurance Premiums
        • Medicare Premiums Qualify for Self-employed Health Insurance Deduction
      • KEY ISSUE 16C Deducting Contributions to Retirement Plans.
        • S Corporations Can Establish Qualified Retirement Plans
        • Retirement Plans Common to S Corporations
        • Deducting Contributions
        • Reporting the Deduction
        • Entities under Common Control
      • KEY ISSUE 16D Deducting Contributions to Simplified Employee Pensions (SEPs) and Simple Retirement Plans (SIMPLEs).
        • Simplified Employee Pensions
        • SIMPLE Retirement Plans
      • KEY ISSUE 16E Understanding Employee Stock Ownership Plans (ESOPs).
      • KEY ISSUE 16F Understanding the Prohibited Transaction Rules for Qualified Plan Loans to S Shareholders.
      • KEY ISSUE 16G Deducting Payments to Nonqualified Deferred Compensation Plans.
        • Employer's Deduction
        • Built-in Gains Tax Implications
      • KEY ISSUE 16H Small Employer Health Insurance Is Eligible for Tax Credit.
      • KEY ISSUE 16I Cafeteria Plans.
        • Cafeteria Plans Offer Multiple Benefits
        • Treatment of 2% Shareholders
        • Simple Cafeteria Plans
      • ILLUSTRATION 16-1: Fringe Benefits Comparison Chart
      • ILLUSTRATION 16-2: Schedule K-1 Reporting Medical Insurance Premiums Paid on a Shareholder's Behalf
    • Chapter 17: Travel and Entertainment
      • Introduction
      • KEY ISSUE 17A Using Employee Reimbursement and Other Expense Allowance Arrangements.
        • Reimbursements and Other Expense Allowance Arrangements
        • Substantiation Requirements
        • Per Diem Method of Substantiating Travel Expenses
        • Alternate High-low Per Diem Method
        • Related Party/10% Shareholder Limitation
      • KEY ISSUE 17B Applying the 50% Limitation on Meal and Entertainment Deductions.
        • 50% Limitation Rules
        • Reporting the Disallowed Portion of Meals and Entertainment Expenses
      • KEY ISSUE 17C Limiting Deductions for Entertainment Facilities and Club Dues.
        • Entertainment Expenses
        • Entertainment Facilities
        • Clubs as Entertainment Facilities
        • Club Dues
        • Reporting Club Dues
      • KEY ISSUE 17D Deducting Cost of Tickets to Athletic Events and Skybox Rentals.
        • Tax Treatment Depends on Whether an Employee Attends the Event with the Customer
        • Deduction Limitations
      • KEY ISSUE 17E Comparing Travel and Transportation Expenses.
        • Travel and Transportation Distinguished
        • Travel Expenses
        • Transportation Expenses
        • Employee's Personal Auto Used for Corporate Business
        • Corporate Deduction for Employer-provided Autos
        • Reporting Requirements
      • KEY ISSUE 17F Limiting Deductions for Automobile Leases.
        • Inclusion Amount
        • Partial Business Use of Leased Auto
      • KEY ISSUE 17G Valuing Noncommercial Flights on an Employer's Aircraft.
        • Valuing Flights on Business Aircraft
        • Valuing Entertainment Use of Business Aircraft
    • Chapter 18: Other Deductions
      • Introduction
      • KEY ISSUE 18A Claiming the Domestic Production Activities Deduction.
        • Deduction for Domestic Production Activities
        • Reduced Deduction for Oil-related Income
        • Recognizing and Understanding the Key Terms and Abbreviations
        • Identifying Qualified Production Property
        • Identifying Activities Eligible for the Deduction
        • Activities That Include Only Sales or Services Generally Do Not Qualify
        • Identifying Manufactured, Produced, Grown, or Extracted (MPGE) Activities
        • Meeting the In Significant Part Requirement
        • Meeting the In the United States Requirement
        • Construction Activities
        • Identifying Engineering or Architectural Services
        • Food or Beverage Sales
        • Determining Domestic Production Gross Receipts
        • Computing Gross Receipts
        • Allocating Gross Receipts
        • Allocating Costs to Gross Receipts
        • Allocating Cost of Goods Sold
        • Allocating Other Deductions and Costs
        • Using Statistical Sampling to Make Allocations
        • Determining W-2 Wages
        • AMT Implications
        • Determining Qualified Production Activities Income
        • Computing the Deduction
        • Applying the Special Section 199 Pass-through Rules
        • Effect of Section 199 Deduction on Basis
        • Reporting the Deduction
      • KEY ISSUE 18B Passing Charitable Contributions through to Shareholders.
        • S Corporation Charitable Contributions Are Not Deducted at Corporate Level
        • Passing Through Property Contributions Other Than Cash
        • Contributions of Food Inventory
        • Qualified Conservation Easements
        • Effect on Stock Basis
        • Effect on AAA
        • Substantiation Requirements
        • Reporting Requirements
        • Timing of the Charitable Contribution Deduction
        • Special Rule When Donor Receives the Right to Athletic Event Tickets
        • Charitable Contributions Passed through to an ESBT
        • Effect of Charitable Contributions on Built-in Gains Tax
      • KEY ISSUE 18C Reporting Rental Expense Paid in Advance.
      • KEY ISSUE 18D Reporting Directors' Fees and Expenses.
        • Directors' Fees Are Reported on Form 1099-MISC
        • Directors' Fees Are Earnings from Self-employment
      • KEY ISSUE 18E Recovering Previous Deductions--the Tax Benefit Rule.
        • Tax Benefit Rule Applies When Subsequent Events Show Deduction Was Incorrect
      • ILLUSTRATION 18-1: Schedules K and K-1 Reporting Domestic Production Activities Deduction Information
      • ILLUSTRATION 18-2: Filled-in Form 8903 Reporting the Corporation's Domestic Production Activities Deduction Information
  • TRANSACTIONS WITH SHAREHOLDERS
    • Chapter 19: Shareholder Stock Basis
      • Introduction
      • KEY ISSUE 19A Maintaining Accurate Basis Records.
        • Initial Basis in S Corporation Stock
        • Tracking Basis
      • KEY ISSUE 19B Calculating Initial Shareholder Basis.
        • Initial Basis in S Corporation Stock
        • Basis of Stock Acquired by Gift
        • Basis of Stock Acquired by Inheritance
        • Economic Outlay
      • KEY ISSUE 19C Adjusting Basis Annually.
        • Basis Adjustments
        • Increases to Basis
        • Nonseparately Stated Income
        • Separately Stated Income Items
        • Tax-exempt Income
        • Depletion (Other Than Oil and Gas)
        • Addition to Asset's Basis Due to General Business Credit Recapture
        • Decreases to Basis for Distributions
        • Other Decreases to Basis
        • Nonseparately Stated Loss
        • Separately Stated Items of Deduction or Loss
        • Charitable Contributions
        • Nondeductible, Noncapital Expenses
        • Reduction in Asset's Basis Due to General Business Credit
        • Oil and Gas Depletion
        • Section 59(e) Expenditures
        • Effect of Cancellation of Debt Income on Basis
        • Basis Cannot Be Reduced below Zero
        • Unused Losses Carry Over to Future Years
        • Unreported Income Does Not Increase Basis
        • Basis Is Reduced Even If Loss or Deduction Provides No Tax Benefit
        • Domestic Production Activities Deduction Does Not Affect Basis
        • Stock and Debt Basis Worksheet
      • KEY ISSUE 19D Ordering and Timing Rules of Shareholder Basis Adjustments.
        • Timing of Basis Adjustments
        • Sale of Shares
        • Order of Adjustments to Stock Basis
        • Election to Reduce Basis by Loss or Deduction Items before Nondeductible Expenses
        • Worthless Stock
        • Basis Adjustments Are Allocated to Each Share
      • KEY ISSUE 19E Adjusting Basis for Pass-through and Distributions.
        • Basis Is Increased by Income, Reduced by Distributions, and Reduced by Losses
        • Property Distributions
        • Corporate Liquidation
      • KEY ISSUE 19F Deducting Shareholder Losses to the Extent of Basis.
        • Losses and Deductions May Be Subject to Limitation at the Shareholder Level
        • Deductible Losses and Deductions Are Limited to Basis
        • Basis Is Increased by Pass-through Income before Losses and Deductions Are Considered
        • Treatment When Separate Types of Losses Exceed Basis
        • How Current Year's Income Is Applied against Loss Carryovers
        • Deduction for Charitable Contributions of Appreciated Property May Exceed Basis
        • Gain on Sale of S Corporation Stock Does Not Increase Basis
        • Domestic Production Activities Deduction Does Not Affect Basis
        • Effect of Credits on Basis
      • KEY ISSUE 19G Adjusting Basis of Inherited S Stock by Income in Respect of a Decedent.
        • Income in Respect of a Decedent
        • Income Tax Treatment of IRD
        • Stepped-up Basis of S Stock Is Reduced by IRD
        • Pass-through of IRD
      • KEY ISSUE 19H Adjusting Basis for Life Insurance Premiums and Proceeds.
        • Effect of Life Insurance Proceeds and Benefits on Basis
        • Alternative Minimum Tax
      • KEY ISSUE 19I Taking Advantage of the Post-termination Transition Period.
      • ILLUSTRATION 19-1: Using Schedule K-1 to Determine Basis Changes
    • Chapter 20: Shareholder Debt Basis
      • Introduction
      • KEY ISSUE 20A Deducting Shareholder Losses against Debt Basis.
        • Losses Deducted against Debt Basis after Stock Basis Is Depleted
        • 1120S Balance Sheet
        • Repaid Debt
        • Pass-through Income Increases Previously Reduced Debt Basis
        • Debt Basis Is Increased by "Net Increase"
        • Debt Basis Is Not Increased If Net Amount Is Negative
        • When Debt Basis Adjustments Are Effective
        • Adjusting Debt Basis When Debt Is Disposed of or Repaid during the Year
        • Open Account Debt and Shareholder Advances
        • Debt Basis Reduction When Shareholder Holds Multiple Debts
        • Adjusting Debt Basis When Shareholder Terminates Ownership
        • Economic Outlay Is Required to Acquire Debt Basis
        • Only Direct Loans from Shareholder Provide Debt Basis
        • Circular or Intercompany Loans Generally Do Not Provide Debt Basis
        • Economic Substance Doctrine
        • Shareholder Guarantees
        • Debt Basis Acquired When Payments Are Made under a Loan Guarantee
        • Substitution of Shareholder's Notes for Corporate Note
        • Obtaining Debt Basis for New Loan from Bank to Shareholder and Shareholder to Corporation
        • Corporation Should Not Repay Shareholder's Loan from Bank
        • Increasing Debt Basis to Deduct Losses
        • Distributions Do Not Reduce Debt Basis
        • Carryover Losses
        • Qualified Subchapter S Subsidiary
      • KEY ISSUE 20B Reporting the Repayment of Reduced-basis Shareholder Debt.
        • Repayment Can Result in Gain to Shareholder
        • Contributing Note to Capital
        • Repayment of Shareholder Loans
        • Tax Character of Gain from Repayment of Loan
        • Partial Repayment of Loan from Shareholder
        • Multiple Loans
        • Effect of Current Year's Income on Repaid Note
        • Effect of Current Year's Losses on Repaid Note
        • Basis Increases When There Are Multiple Notes
        • Shareholder Can Repay Specific Loan
        • Open Account Debt and Shareholder Advances
        • Loan Repayments Are Reported on Form 1120S
        • Year-end Loans Can Accelerate Loss Deductions
        • Gain on Repayment of Reduced-basis Note Does Not Increase Basis
      • KEY ISSUE 20C Imputing Interest on Below-market Loans from Shareholder.
      • KEY ISSUE 20D Recognizing Second-class-of-stock Danger.
      • KEY ISSUE 20E Reporting Interest Paid on Loans from Shareholders.
        • Allocating Interest Expense on Loans from Shareholder
        • Interest Expense Paid by Accrual-basis S Corporation
      • KEY ISSUE 20F Adjusting Debt Basis for Simultaneous Loans Payable to and Receivable from a Shareholder.
      • KEY ISSUE 20G Determining Whether Funds from Shareholder Are Loans or Capital Contributions.
        • Debt versus Equity
        • IRS Can Recharacterize Debt as Equity
      • KEY ISSUE 20H Adjusting Debt Basis for Open Account Debt and Shareholder Advances.
        • Open Account Debt Is Subject to $25,000 Threshold
        • Effect of Treating Debt as If It Were Evidenced by a Written Instrument
        • Disposition of Open Account Debt or Stock during Tax Year
        • Debts Evidenced by Written Notes Are Treated Separately
        • Treatment of Open Account Debt Outstanding before October 20, 2008
      • ILLUSTRATION 20-1: Calculation of Basis in Stock and Debt
      • ILLUSTRATION 20-2: Calculation of Basis in Stock and Debt
      • ILLUSTRATION 20-3: Calculation of Basis in Stock and Debt When Distributions Exceed Income
    • Chapter 21: Distributions
      • Introduction
      • KEY ISSUE 21A Defining Distributions.
        • Definition
        • Relationship of Pass-through Income, Stock Basis, and Distributions
        • Definition of Dividends
        • Capital Gain and Dividend Tax Rates
        • A Distribution May Include a Dividend
      • KEY ISSUE 21B Determining Accumulated Earnings and Profits (AE&P) Balance.
        • Dividend Treatment for Distributions of AE&P
        • Calculation of C Corporation E&P
        • AE&P When C Corporation Elects S Status
        • Reduction of AE&P
        • Adjusting AE&P after S Election Is Effective
        • AE&P Balance Appears on Form 1120S
        • Determining Balance of AE&P May Be Difficult
      • KEY ISSUE 21C Making Distributions from S Corporations with No AE&P.
        • Ordering Rules When S Corporation Has No AE&P
        • Stock Basis Adjustments for Pass-through Items and Distributions
        • Distributions Not in Excess of the Shareholder's Stock Basis
        • Distributions in Excess of Stock Basis Are Capital Gain
        • How a Corporation without AE&P Reports Distributions
        • How a Shareholder Reports the Receipt of Distributions in Excess of Basis
        • Effect of Distributions When Shareholders Have Different Bases
        • Distributions Do Not Reduce Debt Basis
        • Shareholder Can Receive Tax-free Distributions to Extent of Stock Basis at the Beginning of the Year
        • Effect of Carryover Losses on Basis and Distributions
        • Effect of Negative AE&P Balance
        • Accumulated Adjustments Account Is Tracked on Form 1120S, Schedule M-2
      • KEY ISSUE 21D Making Distributions from S Corporations with AE&P.
        • Ordering Rules When the Corporation Has AE&P
        • S Corporation without AE&P Cannot Issue a Dividend
        • Reporting Distributions to Shareholders When the Corporation Has AE&P
        • Accumulated Adjustments Account (AAA)
        • AAA Adjustments
        • AAA Adjustment Order
        • AAA When Aggregate Adjustments Are Positive
        • AAA When Aggregate Adjustments Are Negative
        • AAA Is Reduced by Entire Loss Amount
        • AAA Is Calculated before Stock Basis
        • Nontaxable Distributions of AAA Are Limited to Stock Basis
        • AAA Balance Can Be below Zero
        • AAA Is a Corporate-level Account
        • Distributions That Exceed AAA and AE&P
        • Distributions When AAA Has Negative Balance
        • Adjustments When Corporation Has No AE&P and AAA Has a Negative Balance
        • Adjustments When Corporation Has AE&P and AAA Has a Negative Balance
        • Distributions When AAA Exceeds Stock Basis
        • Multiple Distributions during the Year That, in the Aggregate, Exceed AAA
        • Beginning Stock Basis or AAA Can Be Distributed Free of Tax
        • Basis, AAA, and Charitable Contributions
        • Stock Sales and Redemptions
        • Distributions Paid to Owner of Restricted Bank Director Stock
      • KEY ISSUE 21E Distributing Previously Taxed Income (PTI).
        • Definition
        • Distribution Order When PTI Is Present
        • Comparison of AAA and PTI
        • Adjusting AAA and PTI
        • Adjusting AAA, PTI, and AE&P
        • Effect of Stock Disposition on AAA and Previously Taxed Income
        • Effect on PTI of Transfers between Spouses in a Community Property State
        • PTI Cannot Be Distributed during the Post-termination Transition Period
      • KEY ISSUE 21F Distributing the Other Adjustments Account (OAA).
      • KEY ISSUE 21G Distributing Property to Shareholders.
        • Property Distributions
        • Holding Period
        • Distribution of Appreciated Property
        • Shareholder Basis in Distributed Property
        • Depreciation Recapture Rules Apply to Distributions of Property
        • Distribution of Property When Basis Exceeds Fair Market Value
        • Pass-through of Gain When an Appreciated Asset Is Distributed
        • Valuing Property Distributions
      • KEY ISSUE 21H Taking Advantage of the Post-termination Transition Period.
      • KEY ISSUE 21I Reporting and Distributing Tax-exempt Income.
        • Reporting Tax-exempt Income
        • Effect of Tax-exempt Income on Basis and AAA
        • Distribution of Tax-exempt Income
        • Effect of Tax-exempt Income on AAA, OAA, Basis, and Distributions
        • Effect of Cancellation of Debt Income on Basis
      • KEY ISSUE 21J Reporting Corporate Life Insurance Proceeds and Premiums.
      • KEY ISSUE 21K Maintaining the AAA Balance When There Is No AE&P.
      • KEY ISSUE 21L Using One of Three Elections to Distribute AE&P before AAA.
        • Election to Bypass AAA
        • Distributing AE&P before AAA and PTI Requires Two Elections
        • Distributing PTI before AAA Requires Election to Bypass AAA
        • Form 5452--Corporate Report of Nondividend Distributions
        • Issuing Corporate Notes to Distribute AE&P
        • Deemed Dividend
      • KEY ISSUE 21M IRS May Recharacterize Distributions as Wages.
      • KEY ISSUE 21N Avoiding IRS Recharacterization of Loans as Distributions.
        • Using Loans in Lieu of Making Taxable Distributions
      • KEY ISSUE 21O Making Disproportionate Distributions without Breaking the Second-class-of-stock Rules.
        • One-class-of-stock Rules
        • Disproportionate Distributions to Shareholders
      • KEY ISSUE 21P Reporting Distributions to Shareholders on Forms 1120S and 1099.
      • KEY ISSUE 21Q Distributing Property When an S Corporation Liquidates.
      • KEY ISSUE 21R Filing Form 5452 for Certain Distributions.
        • Certain S Corporations Must File Form 5452
        • Post-termination Transition Period
      • KEY ISSUE 21S Making Distributions in the Year of Stock Disposition--Effect on AAA, PTI, and AE&P.
      • KEY ISSUE 21T Determining the Active or Passive Nature of Distributions.
      • KEY ISSUE 21U Borrowing to Make Shareholder Distributions.
      • KEY ISSUE 21V Taxing Dividends at Favorable Rates.
        • Qualified Dividends Are Taxed at Maximum 15% Tax Rate
        • Qualified Stock Must Be Held for Specific Period
        • Dividends Received by S Corporation Pass through to Shareholders
        • Dividends Treated as Investment Income Do Not Qualify for Favorable Tax Rates
        • Deemed Dividend Distributions
      • KEY ISSUE 21W Charitable Contributions of Appreciated Property.
        • Passing Through Charitable Contributions of Appreciated Property
        • Adjusting Basis and AAA
        • Charitable Contribution Stock Basis Limitation Rules
        • Alternative Minimum Tax
        • Charitable Contributions of Appreciated Property Are Not Subject to Built-in Gains Tax
      • ILLUSTRATION 21-1: Distributions When the Corporation Has No AE&P
      • ILLUSTRATION 21-2: Distributions in Excess of Stock Basis
      • ILLUSTRATION 21-3: Distributions That Include Dividends
      • ILLUSTRATION 21-4: Sample Filled-in Schedule M-2 When There Is a Net Negative Adjustment
      • ILLUSTRATION 21-5: Distributions That Exceed AE&P
      • ILLUSTRATION 21-6: Reporting Distributions of AAA and PTI on Schedule M-2
      • ILLUSTRATION 21-7: Schedules L, M-1, and M-2 When PTI Is Reduced by a Shareholder's Departure
      • ILLUSTRATION 21-8: Reporting Property Distribution on Schedules L, M-1, and M-2
      • ILLUSTRATION 21-9: Reporting Distributions on Form 5452
    • Chapter 22: Property Transactions with Shareholders
      • Introduction
      • KEY ISSUE 22A Distributing Property to Shareholders.
      • KEY ISSUE 22B Selling Property between Related Parties.
        • Losses on Sales or Exchanges between Related Parties
        • Definition of Related Party
        • Sale or Exchange between Corporation and Shareholder
        • Gains and Losses from Related-party Transactions Are Not Offset
        • Disallowed Loss May Reduce Gain on Subsequent Sale
        • The Related-party Rules Can Affect Built-in Gains Tax
        • Gain on Sale to Related Party May Be Ordinary
        • Ordinary Income from Distribution of Appreciated Property
        • Installment Sales
        • Related-party Transactions May Be Scrutinized by IRS
      • KEY ISSUE 22C Corporation-shareholder Rental Transactions.
        • Rent at Other Than FMV May Be Reclassified
        • Renting Home Office Space to an S Corporation
        • Self-rented Property
  • BALANCE SHEET AND EQUITY ACCOUNTS
    • Chapter 23: Schedule L--The Balance Sheet
      • Introduction
      • KEY ISSUE 23A Completing Schedule L, the Balance Sheet per Books.
        • Certain S Corporations Are Not Required to Complete Schedule L Balance Sheet
        • Tying Schedule L to the Books and Records
        • Reporting Assets on Schedule L
        • Reporting Liabilities on Schedule L
        • Reporting Shareholder's Equity on Schedule L
      • KEY ISSUE 23B Completing Schedule L Balance Sheets When S Status Is Effective upon Incorporation.
        • Balance Sheet When Company Incorporates and Elects S Status Simultaneously
        • Retained Earnings When the S Corporation Was Not Previously a C Corporation
        • Certain S Corporations Are Not Required to Complete Schedules L and M-1
      • KEY ISSUE 23C Completing Schedule L Balance Sheets When C Corporation Elects S Status.
        • Balance Sheet Presentation When C Corporation Becomes an S Corporation
        • Retained Earnings When the S Corporation Was Previously a C Corporation
        • Accumulated Earnings and Profits
      • KEY ISSUE 23D Completing Schedule L Balance Sheets in Year of Termination.
        • Balance Sheet Presentation on Final S Corporation Return
        • Initial C Corporation Return, Form 1120
        • Post-termination Transition Period
        • Effect of S Election Termination on AE&P and Stock Basis
        • Balance Sheet Presentation in Year of Liquidation
      • KEY ISSUE 23E Maintaining Schedule L Balance Sheet Equity Accounts.
      • KEY ISSUE 23F Watching for Red Flags on the Balance Sheets.
        • Excess Cash or Investments
        • Distributing AE&P after Year-end
        • Tax-exempt Securities
        • Loans to Shareholders
        • Excess Net Passive Income
        • Loans from Shareholders
        • Second Class of Stock
        • Analyzing Balance Sheet Items
      • ILLUSTRATION 23-1: Schedule L (Form 1120S) When a Company Incorporates and Simultaneously Becomes an S Corporation
      • ILLUSTRATION 23-2: Schedule L (Form 1120S) When There Are Differences in Book and Tax Income
      • ILLUSTRATION 23-3: Schedule L (Form 1120S) on the Final S Corporation Return
    • Chapter 24: Schedules M-1 and M-3
      • Introduction
      • KEY ISSUE 24A Identifying Items Used in Determining Income per the Tax Return.
        • Schedule M-1
        • Permanent Differences
        • Timing Differences
        • Schedule M-3
        • Uncertain Tax Positions
      • KEY ISSUE 24B Reconciling Income Included on Schedule K but Not Recorded on Books.
      • KEY ISSUE 24C Reconciling Expenses Recorded on Books but Not Included in Income per the Tax Return.
      • KEY ISSUE 24D Reconciling Income Recorded on Books but Not Included in Income per the Tax Return.
      • KEY ISSUE 24E Reconciling Deductions Included on Schedule K but Not Charged against Book Income.
      • KEY ISSUE 24F Completing Schedule M-1.
        • Book and Tax Reconciliation
        • Certain S Corporations Are Not Required to Complete Schedules L and M-1
      • KEY ISSUE 24G Preparing Schedule M-3.
        • When to File Schedule M-3
        • Guidance on IRS Website
        • Reportable Entity Partner
        • Schedule M-3 Preparation Details in a Nutshell
        • Book versus Tax Assets
        • Preparing Part I--Financial Information and Net Income (Loss) Reconciliation
        • QSub Is Not Separately Reported
        • Preparing Part II--Reconciliation of Net Income (Loss) per Income Statement of S Corporation with Income (Loss) per Return
        • Preparing Part III--Reconciliation of Net Income (Loss) per Income Statement of S Corporation with Income (Loss) per Return--Expense/Deduction Items
        • Items Must Be Separately Stated and Adequately Disclosed
        • Reconciling Cost of Goods Sold, Interest Income, and Interest Expense
        • Comparing Schedules M-1 and M-3
        • Disclosing Reportable Transactions
      • ILLUSTRATION 24-1: Reporting Book-tax Differences on Schedule M-1
      • ILLUSTRATION 24-2: Tracking M-1 Adjustments (Book-tax Differences)
      • ILLUSTRATION 24-3: Reporting Book-tax Differences on Schedule M-3
    • Chapter 25: Schedule M-2
      • Introduction
      • KEY ISSUE 25A Making Tax-free Distributions to the Extent of the Accumulated Adjustments Account.
        • AAA Is Adjusted Annually
        • AAA and Retained Earnings Balances May Not Agree
        • Annual Adjustments to AAA
        • AAA Balance Can Be Less Than Zero
        • Effect of AE&P
        • Maintaining the AAA Balance When There Is No AE&P
      • KEY ISSUE 25B Determining the Effect of Distributions on Stockholders' Equity Accounts.
        • Distributions Reduce AAA and Other Equity Accounts
        • Distributions Reduce Retained Earnings
      • KEY ISSUE 25C Determining the Effect of the Other Adjustments Account on Distributions and Schedule M-2.
      • KEY ISSUE 25D Making Tax-free Distributions to the Extent of Previously Taxed Income.
      • KEY ISSUE 25E Accounting for Life Insurance Premiums.
      • KEY ISSUE 25F Entering Pass-through Items Affecting Basis on Schedule M-2.
        • Preparing Schedules K, M-1, and M-2
        • Comprehensive Example
      • ILLUSTRATION 25-1: Calculation of AAA Balance on Schedule M-2
      • ILLUSTRATION 25-2: Calculation of Negative AAA Balance on Schedule M-2
      • ILLUSTRATION 25-3: Calculation of OAA Balance
      • ILLUSTRATION 25-4: Reporting Distributions of OAA on Schedule M-2
      • ILLUSTRATION 25-5: Book/Tax Reconciliation on Schedules K and M-1
      • ILLUSTRATION 25-6: Preparing Schedule M-2, a Comprehensive Example
      • ILLUSTRATION 25-7: Calculations of Stock Basis, AAA, OAA, PTI, Retained Earnings, and AE&P
  • PASS-THROUGH TO SHAREHOLDERS
    • Chapter 26: Schedules K and K-1--Pass-through
      • Introduction
      • KEY ISSUE 26A Nonseparately Stated Income or Loss and Separately Stated Items.
        • Two Categories of Pass-through Items
        • Nonseparately Stated Income or Loss
        • Separately Stated Items
        • Reporting Pass-through Items
        • Cancellation of Debt Income
        • Pass-through Income Is Generally Considered Received Evenly throughout Tax Year
        • Reporting Income and Deductions on Schedule K-1
      • KEY ISSUE 26B Reporting Results of Operations.
        • When Pass-through Is Reported by the Shareholder
        • Passing through the Domestic Production Activities Deduction
        • Pass-through to an S Corporation Partner
        • Reporting Multiple Activities on Schedule K-1
        • S Corporation's Treatment of Self-employment Income Passed Through by Partnership
        • Applying Basis Limitations to Losses Passed Through by Partnership
      • KEY ISSUE 26C Allocating Pass-through to Shareholders.
        • Pass-through Items Are Generally Allocated on a Per-share, Per-day Basis
        • Election to Use Specific Accounting upon Complete Disposition of a Shareholder's Stock
        • Election to Use Specific Accounting upon a Qualifying Disposition of Stock
        • Decision on Allocation Methods Can Be Deferred Beyond Year-end
        • Multiple Ownership Changes
        • Pass-through on the Day the Shares Are Transferred
        • Death of a Shareholder
        • Pass-through of Life Insurance Proceeds
        • Worthless Stock
        • Effect of Bankruptcy on S Election
        • Stock Transfer Worksheet
      • KEY ISSUE 26D Allocating Income and Losses in the S Termination Year.
        • S Termination Year
        • Allocation of Pass-through Items
        • C Corporation Short Year Income Must Be Annualized
        • Election to Use Specific Accounting for Each Short Year
        • Specific Accounting Method Is Mandatory under Certain Circumstances
        • Pass-through to Shareholders in Year the S Election Terminates
      • KEY ISSUE 26E Passing through Corporate-level Tax to Shareholders.
        • Built-in Gains Tax
        • Tax on Excess Net Passive Income
        • Recapture of Business Credits
      • KEY ISSUE 26F Reporting Self-charged Interest.
      • KEY ISSUE 26G Disclosing Inconsistent Treatment on Shareholder's Return.
      • KEY ISSUE 26H Deducting Corporate Expenses Paid by Shareholder.
        • Interest Incurred by Shareholder to Purchase Stock or Inject Capital into an S Corporation
      • KEY ISSUE 26I Limitations on Losses and Deductions.
        • Bankruptcy Trustee Could Not Force S Shareholders to Return Refunds Due to Pass-through Losses
      • KEY ISSUE 26J Considering Beneficial Owner to Be an S Corporation Shareholder.
        • Beneficial Owner of S Stock Is Considered to Be Shareholder
        • Effect When No Shares Are Issued
        • Shares Held by Spouse as Community Property
        • Restricted Stock
        • Eligible S Corporation Trusts
      • ILLUSTRATION 26-1: Reporting Nonseparately Stated Income and Separately Stated Items
      • ILLUSTRATION 26-2: By-activity Information Worksheet
      • ILLUSTRATION 26-3: Election to Apply Specific Accounting Rules in Connection with the Termination of a Shareholder's Entire Interest
      • ILLUSTRATION 26-4: Election to Apply Specific Accounting Rules in Connection with a Qualifying Stock Disposition
      • ILLUSTRATION 26-5: Election to Determine Short-period Income Based on Specific Accounting
    • Chapter 27: Alternative Minimum Tax
      • Introduction
      • KEY ISSUE 27A AMT Applies at the Shareholder Level.
      • KEY ISSUE 27B S Corporations Are Not Subject to AMT.
        • Small Corporation Exemption Does Not Apply to S Corporations
        • AMT Exemption
      • KEY ISSUE 27C Applying AMT Rules to Depreciation Adjustments and Preferences.
        • Depreciation of Property Placed in Service after 1986
        • Regular Tax and AMT Depreciation Recovery Periods--Property Placed in Service after 1998
        • Elections to Eliminate AMT Depreciation Adjustments
        • Property Subject to the Bonus Depreciation Deduction
      • KEY ISSUE 27D Making Corporate and Shareholder Elections to Minimize AMT.
        • Shareholder's Section 59(e) Election Can Eliminate Certain AMT Adjustments and Preferences
        • Treatment of Qualified Expenditures at the S Corporation Level
        • Section 59(e) Election to Amortize Qualified Expenditures Is Made at the Shareholder Level
        • Circulation Expenditures
        • Research and Experimental Expenditures
        • Intangible Drilling Costs
        • Mining Exploration and Development Costs
        • Disposition of Property Subject to the Section 59(e) Election
        • Effect of the Section 59(e) Election on Stock Basis
        • Claiming the Minimum Tax Credit
      • KEY ISSUE 27E Reporting Adjustments and Preferences from Passive Activities.
        • Passive Activities
        • Reporting Adjustments and Preferences from Passive Activities
        • Disposition of a Passive Interest
      • KEY ISSUE 27F Calculating Shareholder's Basis for Regular Tax and AMT Purposes.
        • Alternative Minimum Tax Basis Adjustments
        • AAA and AE&P Adjustments
      • KEY ISSUE 27G Applying Noncorporate AMT Rates for Long-term Capital Gains.
        • Gain on Collectibles
        • Section 1202 Small Business Corporation Stock
      • KEY ISSUE 27H Effect of AMT on Business Credits.
      • ILLUSTRATION 27-1: Reporting AMT Depreciation and Gain (Loss) Adjustments
      • ILLUSTRATION 27-2: Reporting Circulation Expenses
      • ILLUSTRATION 27-3: Reporting R&D Expenses from Passive Activity
    • Chapter 28: Business Credits
      • Introduction
      • KEY ISSUE 28A Identifying the Credits Composing the General Business Credit.
        • General Business Credit Is Made up of Different Credits
        • Commonly Encountered General Business Credits
        • Shareholder Generally Claims Credits on Form 3800
      • KEY ISSUE 28B Limitations on General Business Credits.
        • Specified Credits Offset AMT
        • Carryback and Carryover of Unused General Business Credits
        • Eligible Small Business Credits Originating in 2010
        • Stock Basis
        • Passive Activity Credits
        • Suspended Passive Activity Credits
      • KEY ISSUE 28C Recapture of General Business Credits.
        • Investment Tax Credit
        • Effects of Corporate-level Recapture
        • Credit Recapture Caused by Reduction in Stock Ownership
        • Recapture of Low-income Housing Credit
      • KEY ISSUE 28D Understanding the Effect of Credits on Stock Basis.
        • Pass-through Credits Are Not Limited to Basis
        • Effect of Credits That Reduce Operating Expenses
      • KEY ISSUE 28E Credits Relating to Rental Real Estate.
        • Low-income Housing Credit
        • Rehabilitation Credit
      • KEY ISSUE 28F Alternative Motor Vehicle Credit and New Qualified Plug-in Electric Drive Motor Vehicle Credit.
        • Alternative Motor Vehicle Credit
        • New Qualified Plug-in Electric Drive Motor Vehicle Credit
      • KEY ISSUE 28G Claiming the Disabled Access Credit.
        • Qualifying for the Disabled Access Credit
        • Disabled Access Credit and Expenditures for Removal of Barriers
        • Disabled Access Expenditures May Be Required to Address a Particular Concern of the Disabled
        • Web Access Expenses Are Not Eligible for Disabled Access Credit
      • KEY ISSUE 28H Claiming the Employer Social Security Credit.
        • Employer Social Security Credit Can Offset AMT
      • KEY ISSUE 28I Claiming the Credit for Small Employer Pension Plan Startup Costs.
      • KEY ISSUE 28J Claiming the Credit for Federal Tax on Fuels.
      • KEY ISSUE 28K Small Employer Health Insurance Credit.
        • Eligible Small Employer
        • Amount of the Credit
        • Calculating the Credit
        • Reporting the Credit
      • KEY ISSUE 28L Temporary Tax Credit for Retaining Qualified New Employees.
      • ILLUSTRATION 28-1: Partnership Reporting Pass-through of Credit to S Corporation
      • ILLUSTRATION 28-2: S Corporation Reporting Pass-through of Credit to Shareholder
      • ILLUSTRATION 28-3: Attachment to Form 1120S Reporting Credit Passed through from Partnership
      • ILLUSTRATION 28-4: Passive Activity Limitation to Low-income Housing Credit
      • ILLUSTRATION 28-5: Reporting Low-income Housing Credit as a Component of General Business Credit
      • ILLUSTRATION 28-6: S Corporation Reporting Qualified Rehabilitation Expenditures
      • ILLUSTRATION 28-7: Schedule K-1 Reporting Qualified Rehabilitation Expenditures to Shareholder
      • ILLUSTRATION 28-8: Shareholder Reporting Qualified Expenditures from Passive Activity
      • ILLUSTRATION 28-9: Special Allowance for Rehabilitation Credit
      • ILLUSTRATION 28-10: Credit for Small Employer Health Insurance Premiums
      • ILLUSTRATION 28-11: New Hire Retention Credit
    • Chapter 29: Foreign Taxes
      • Introduction
      • KEY ISSUE 29A Paying or Incurring Foreign Taxes.
        • Overall Accounting Method
        • Cash Basis S Corporations
        • Accrual Basis S Corporations
      • KEY ISSUE 29B Passing Foreign Taxes through to Shareholders.
        • Substantiation Requirements
        • Categories of Foreign Source Income
      • KEY ISSUE 29C Sourcing Gain on the Sale of S Corporation Stock.
      • KEY ISSUE 29D Reporting Foreign Operations of S Corporations.
        • Schedule N (Form 1120)
        • Form 8858
        • Form 8865
        • Form 5471
        • Form 3520
        • Form 8873
        • Form TD F 90-22.1
        • Foreign Account Tax Compliance Act (FATCA)
      • ILLUSTRATION 29-1: Reporting Foreign Tax Information to Shareholders
      • ILLUSTRATION 29-2: S Corporation's Foreign Taxes Deducted by Shareholder
  • SHAREHOLDER LOSSES
    • Chapter 30: Shareholder Losses: Basis Limitations
      • Introduction
      • KEY ISSUE 30A Limiting Losses at the Shareholder Level.
        • Loss and Deduction Items Are Passed Through to Shareholders
        • Properly Calculating Basis Is a Challenge
        • Net Operating Losses Apply at Shareholder Level
      • KEY ISSUE 30B Repaying Reduced-basis Shareholder Debt.
      • KEY ISSUE 30C Reporting Current and Carryover Losses on Form 1040.
      • KEY ISSUE 30D Carrying Unused Losses to Subsequent Years.
        • Unused Losses Carry over Indefinitely
        • Carryover Losses Can Be Deducted When the Corporation Has Income
        • Carryover Losses Can Be Deducted When the Shareholder Increases Basis
        • Shareholder's Unused Losses upon Disposition of Stock
        • Applying Current and Carryover Losses against Basis When Stock Is Sold
        • Gain on Stock Sale Does Not Increase Stock or Debt Basis
        • Carryover Losses When a Portion of Stock Is Transferred
        • Effect of Stock Disposition When Loss Carryovers Are Applied against Debt Basis
        • Carryover Losses When Stock Is Transferred to a Spouse or Former Spouse
        • Midyear or Partial Stock Transfers
        • Carryover Losses When Stock Is Transferred by Gift
        • Carryover Losses When Shareholder Dies
        • Carryover Losses after Termination of S Status
        • Practice Aids
      • KEY ISSUE 30E Using the Post-termination Transition Period to Deduct Losses.
      • ILLUSTRATION 30-1: Using Carryover Losses against Current Income
    • Chapter 31: Passive Activity Loss
      • Introduction
      • KEY ISSUE 31A Defining, Grouping, and Separating Activities.
        • Passive Activity Loss Restrictions
        • Unused Passive Activity Losses Carry Forward
        • Passive Activity Losses Are Limited at Shareholder Level
        • Passive Activity Loss Rules Only Affect Deductibility of Losses
        • Definition of Activity
        • Certain Rental Income Is Not Passive
        • Facts and Circumstances Test for Determining Whether Activities Should Be Separate or Aggregated
        • Grouping Activities of S Corporations and Shareholders
        • Reporting Separate Activities on Form 1120S and Schedule K-1
        • Election to Aggregate Business or Rental Activities
        • Activity Groupings Must Remain Consistent
        • Pros and Cons of Combining and Separating Business Activities
        • Rental Activities
        • Grouping Rental and Business Activities
        • Restricting the Grouping of Certain Activities by Limited Partners
      • KEY ISSUE 31B Identifying the Passive or Nonpassive Nature of Pass-through.
        • Nonseparately Stated Income
        • Separately Stated Items
        • Material Participation Is Determined at Shareholder Level
        • Separate Activities Should Be Identified on Tax Return
      • KEY ISSUE 31C Materially Participating in an S Corporation's Activities.
        • Material Participation
        • Measuring Material Participation of Estates and Trusts
        • Changing Level of Participation from Not Material to Material--Activity Was Formerly Passive
        • Oil and Gas Working Interest
        • Recharacterization of Income--Significant Participation Activities
      • KEY ISSUE 31D Reporting Rental Income or Loss for Passive Activity Purposes.
        • Rental Income or Loss Is Generally Passive
        • Special Rules Apply to Real Estate Professionals
        • Combining or Separating Rental Activities
        • Grouping Activities of S Corporations and Shareholders
        • Election to Aggregate Rental Activities
        • Certain Rental Income Is Not Passive
        • Reporting Rental Real Estate Activities
        • $25,000 Rental Real Estate Allowance
        • Casualty Losses
        • Self-rented Property and Other Rental Income Recharacterized as Nonpassive
        • Passive Activity Loss Relief for Real Estate Professionals
      • KEY ISSUE 31E Combining or Separating Activities When There Are Rental and Nonrental Activities.
        • Rental and Nonrental Activities Can Be Combined under Certain Circumstances
        • Combining Rental Activity and Business Activity When the Activities Are Commonly Owned
        • Rental of Real and Personal Property
      • KEY ISSUE 31F Identifying Portfolio Income.
        • Definition of Portfolio Income
        • Reporting Portfolio Income and Expenses on Form 1120S, Schedules K and K-1
        • Self-charged Interest
        • Income Received from S Corporation May Be Portfolio Income
      • KEY ISSUE 31G Treating Covenant Not to Compete as Passive Activity.
      • KEY ISSUE 31H Reporting Interest Expense under the Passive Activity Rules.
        • Interest Incurred to Carry a Passive Activity
        • Use of Loan Proceeds Affects Interest Expense Classification
        • Self-charged Interest
        • Self-charged Rules Apply Only to Interest
        • Election Out of the Self-charged Interest Rules
      • KEY ISSUE 31I Determining the Passive or Nonpassive Nature of Gain on Disposition of Property.
        • Disposition of Property
        • Disposition of S Corporation Stock
      • KEY ISSUE 31J Determining the Passive or Nonpassive Nature of Distributions.
        • Distributions
        • Distributions in Excess of Shareholder's Stock Basis
        • Passive or Nonpassive Nature of Distributions
        • Capital Gains Distributions May Offset Both Suspended Passive and Capital Losses
        • Distributions of Accumulated Earnings and Profits
      • KEY ISSUE 31K Deducting Suspended Passive Activity Losses.
        • Unused Passive Losses
        • Suspended Passive Losses Are Deductible upon Disposition of Passive Activity
        • Disposition of S Stock
        • Disposition of Substantially All of an Activity
        • Disposition of an Activity by an S Corporation
        • Interaction of At-risk Limits with Basis Limits and Passive Activity Loss Limits
        • Capital Loss Limitation
        • Capital Gain from Disposition of Passive Activity
        • Installment Sale of a Passive Activity
        • Transfers by Gift
        • Transfers to a Related Party
        • Decedent's Final Return
        • Allocating Gains and Losses upon Disposition of S Stock
        • Distributions to Shareholders
      • KEY ISSUE 31L Carrying Over Suspended Passive Activity Losses in Nonrecognition of Gain Transfers.
      • KEY ISSUE 31M Carrying Over Suspended Passive Activity Losses upon Electing S Status.
      • KEY ISSUE 31N Carrying Over or Deducting Suspended Passive Activity Losses upon Terminating S Status.
      • KEY ISSUE 31O Carrying Over Suspended Passive Activity Credits after Disposition of an Activity.
      • KEY ISSUE 31P Illustrating the Passive Activities Rules with a Comprehensive Example.
      • ILLUSTRATION 31-1: Election to Group Activities
      • ILLUSTRATION 31-2: Using Suspended Loss Against Current Nonpassive Income
      • ILLUSTRATION 31-3: Reporting Income and Expenses from Rental Real Estate
      • ILLUSTRATION 31-4: Reporting Interest Expense Allocable to Purchase of S Corporation Stock
      • ILLUSTRATION 31-5: Using Passive Losses upon Disposition of an Activity
    • Chapter 32: Shareholder Losses: At-risk Limitations
      • Introduction
      • KEY ISSUE 32A Understanding the Interaction of At-risk Limits with Basis Limits and Passive Activity Loss Limits.
      • KEY ISSUE 32B Activities Subject to the At-risk Rules.
        • Original Five Activities
        • Extension to Trade or Business Activities
        • Activities Currently Subject to the At-risk Rules
      • KEY ISSUE 32C Determining the Amount at Risk at the Shareholder Level.
        • Contributing Money or Property to the S Corporation
        • At-risk Rules Scrutinize the Source of Funds
        • Guarantying Corporate-level Debt
        • Financing with Recourse and Nonrecourse Debt
        • Amounts Borrowed from a Person with an Interest in the Activity
        • Qualified Nonrecourse Financing
      • KEY ISSUE 32D Applying the At-risk Limits to the S Corporation's Activities.
        • Separate Computations May Be Required for Each Activity
        • Active Participation for At-risk Purposes
        • Combining Activities into One Activity
      • KEY ISSUE 32E Adjusting At-risk Basis for S Corporation Operations.
        • Adjusting At-risk Basis for Current Year's Operations
        • Allocating At-risk Basis to Losses and Deductions
        • Records and Reporting
      • KEY ISSUE 32F Carrying over Losses Limited by At-risk Rules.
      • KEY ISSUE 32G Recapturing Negative Amounts at Risk.
      • ILLUSTRATION 32-1: Calculating Amounts at Risk on Form 6198
  • CORPORATE TAXATION
    • Chapter 33: Built-in Gains Tax
      • Introduction
      • KEY ISSUE 33A Identifying Corporations Subject to the Built-in Gains Tax and Summarizing Built-in Gains Rules.
        • Background and Summary of Built-in Gains Rules
        • S Corporations Not Subject to the Built-in Gains Tax
        • Corporations Affected by the Built-in Gains Tax
        • Transferred Basis Property
        • Built-in Gains Rules Do Not Apply When a Corporation Is in C Status
        • Built-in Gains Tax Suspended during 2009, 2010, and 2011 for Certain S Corporations
        • Planning Strategies
      • KEY ISSUE 33B Recognizing Built-in Gains.
        • Built-in Gains Are Triggered by Asset Dispositions
        • Built-in Gain Applies to Assets on Hand When S Status Is Elected
        • 10-Year Recognition Period
        • Determining Built-in Gain or Loss upon Disposition of an Asset
        • Net Recognized Built-in Gain
        • Limitations on Taxation of Built-in Gains
        • Substantiating Value
        • Net Unrealized Built-in Gain (The Overall Limit)
        • Net Unrealized Built-in Loss
        • Recognition Period
        • Cash-basis Receivables
        • Inventory
        • Built-in Losses
        • Built-in Losses Reduce Net Unrealized Built-in Gain
        • Accrued Bonuses to Shareholder-employees
        • Contribution of Built-in Loss Assets
        • Separate Recognition Periods for Transferred Basis Assets
        • Separate Computation for Transferred Basis Assets
        • Exchanged Basis Property
        • Section 481(a) Adjustments
        • Completed Contract Method
        • Installment Sales
        • Discharge of Indebtedness Income and Bad Debt Deductions
        • Partnership Interests
        • Duplication of Built-in Gain Prevented on C to S Conversion
        • Built-in Gains Tax Suspended during 2009, 2010, and 2011 for Certain S Corporations
      • KEY ISSUE 33C Applying the Current Recognition Limit, Taxable Income Limit, and Net Unrealized Built-in Gain (Overall Limit) to Built-in Gains.
        • Current Recognition Limit
        • Net Unrealized Built-in Gain (the Overall Limit)
        • Taxable Income Limit
        • Carryover Rule
        • Taxable Income Limitation in Year the Recognition Period Expires
        • Built-in Gains Tax Suspended during 2009, 2010, and 2011 for Certain S Corporations
      • KEY ISSUE 33D Calculating and Reporting the Built-in Gains Tax.
        • Tax Rate
        • Computing the Built-in Gains Tax
        • Tentative Built-in Gains Tax
        • C Corporation Carryovers Reduce Built-in Gains Tax
        • Limitation on S Corporation's Use of C Corporation General Business Credit
        • Limitation on S Corporation's Use of C Corporation Minimum Tax Credit
        • Special Fuels Credit
        • Estimated Tax Payments
        • Built-in Gains Tax Suspended during 2009, 2010, and 2011 for Certain S Corporations
      • KEY ISSUE 33E Passing the Deduction for Built-in Gains Tax through to Shareholders.
        • Deducting Built-in Gains Tax from S Corporation Income
        • Matching Problems When Tax Is Limited by Taxable Income
      • KEY ISSUE 33F Valuing Goodwill and Intangibles.
        • Appraisals of Goodwill and Intangibles Should Be Completed
        • Goodwill or Intangibles Owned by Shareholders Do Not Generate Built-in Gain
        • Watch for Goodwill and Intangibles
        • Premium Received for Partnership Interest Was Not Subject to Built-in Gains Tax
      • KEY ISSUE 33G Valuing Date-of-conversion Inventory for Built-in Gains Tax Purposes.
        • Built-in Gains Rules Apply to Inventory
        • Method of Valuing Inventory Items
        • Work in Progress
        • When Does a Disposition of Inventory Owned on the Date of Conversion Occur?
        • Are Natural Resources Exempt from the Built-in Gains Tax?
      • KEY ISSUE 33H Applying Built-in Gains Rules to Installment Sales.
        • Installment Note Executed during C Corporation Period
        • Installment Sale Benefits Are Restricted for Built-in Gains Purposes
        • No Built-in Gain Recognition until Payments Are Received
        • Effective Date and Examples
        • Installment Sales Subject to the Special Installment Sale Rules
        • Built-in Gains Tax Suspended during 2009, 2010, and 2011 for Certain S Corporations
      • KEY ISSUE 33I Distributing Property to Shareholders.
        • Property Distributions May Result in Built-in Gains Tax
      • KEY ISSUE 33J Applying the Built-in Gains Rules to Qualified Subchapter S Subsidiaries.
        • Qualified Subchapter S Subsidiary
        • Avoiding Potential Duplicate Built-in Gains Tax Liability for Parent S Corporations
      • KEY ISSUE 33K Accrued Bonuses Can Reduce Net Unrealized Built-in Gain.
        • Bonuses
      • KEY ISSUE 33L Charitable Contributions of Appreciated Property Are Not Subject to Built-in Gains Tax.
      • KEY ISSUE 33M Reporting Built-in Gains during the 2009-2010 and 2011 Built-in Gains Tax Suspension Periods.
        • Built-in Gains Tax Suspended for Certain S Corporations in 2009, 2010, and 2011
        • Qualifying for the 2011 Built-in Gains Suspension Period
        • Built-in Gains Suspension When Recognition Period Began in 2002
        • Built-in Gains Tax Suspension Periods Expire after 2011
        • Applying the 2011 Built-in Gains Tax Suspension Period to Transferred Basis Property
        • Calculating Net Recognized Built-in Gain and Net Unrealized Built-in Gain
        • Reporting Built-in Gains Recognized during Suspension Period
        • Carryover of Built-in Gains
        • Installment Sale Income during Built-in Gains Suspension Periods
      • ILLUSTRATION 33-1: Built-in Gains Tax Worksheet (for 2011 Tax Year)
      • ILLUSTRATION 33-2: Calculating and Reporting the Built-in Gains Tax
    • Chapter 34: Tax on Excess Net Passive Income
      • Introduction
      • KEY ISSUE 34A Identifying Corporations Subject to the Excess Net Passive Income Tax.
        • Requirements
        • Tax Rate
        • Passive Investment Income Can Cause Termination of S Status
        • Accumulated Earnings and Profits
        • Distribute AE&P to Eliminate Exposure to Tax
        • Passive Investment Income
        • Income Derived in the Course of a Trade or Business Is Not Passive
        • Active Rental Trade or Business
        • Interest Income
        • Tax-exempt Interest Income
        • Dividends Received from a Subsidiary Corporation
        • S Corporation Banks
      • KEY ISSUE 34B Computing the Tax on Excess Net Passive Income.
        • Gross Receipts
        • Passive Investment Income
        • Net Passive Income
        • Excess Net Passive Income
        • Taxable Income Limitation
        • Tax Rate and Tax Credits
        • Tax-exempt Interest Income
        • How Tax Is Reported
        • Estimated Tax Payments
      • KEY ISSUE 34C Passing Excess Net Passive Income Tax through to Shareholders.
      • KEY ISSUE 34D Coordinating the Tax on Passive Investment Income with the Built-in Gains Tax.
      • KEY ISSUE 34E Waiving the Tax on Excess Net Passive Income.
      • ILLUSTRATION 34-1: Worksheet for Computing the Tax on Excess Net Passive Income
      • ILLUSTRATION 34-2: Filled-in Schedule K-1 (Form 1120S) Reporting Passive Investment Income Items
    • Chapter 35: Other Tax Payments
      • Introduction
      • KEY ISSUE 35A Making Estimated Tax Payments at the S Corporation Level.
        • Estimated Tax Payments
        • Required Annual Payment
        • Estimated Tax Payments Based on the Previous Year's Excess Net Passive Income Tax
        • Built-in Gain and Business Credit Recapture Cannot Be Based on Last Year's Tax
        • Four Equal Installment Payments
        • Due Dates for Payment of Estimated Tax
        • Four Variable Installment Payments
        • Using the Adjusted Seasonal Method
        • Using the Annualized Income Method
        • Reporting Estimated Tax Payments
        • Quick Refunds
        • Short Tax Years
      • KEY ISSUE 35B Calculating LIFO Recapture.
        • LIFO Inventory on Date S Election Becomes Effective
        • LIFO Recapture When an S Corporation Acquires Inventory from a C Corporation
        • Inventory Adjustment
        • LIFO Recapture Amount
        • LIFO Recapture Tax
        • Transfers of LIFO Inventory
        • Failure to Make Timely LIFO Recapture Installment Payments
        • LIFO Recapture Does Not Terminate LIFO Method
        • Reporting Inventory on Tax Return Balance Sheets and Financial Statements
      • KEY ISSUE 35C Making Required Payments for Fiscal Year Elections.
      • KEY ISSUE 35D Recapturing Business Credits.
      • KEY ISSUE 35E Remitting S Corporation Taxes.
        • Enrollment in Electronic Federal Tax Payment System
        • Payment by Electronic Funds Transfer Is Required
        • Penalty for Failure to Deposit Electronically
        • Transitional Relief When Payment Is Due on a Holiday
      • KEY ISSUE 35F Avoiding the Estimated Tax Underpayment Penalty for S Corporation Shareholders.
        • S Corporation Shareholders
        • Annualization Method
        • Original Return Establishes Estimated Tax Requirements
      • KEY ISSUE 35G Penalty for Failure to Pay.
      • ILLUSTRATION 35-1: Reporting the LIFO Recapture Tax on the Final C Corporation Return
      • ILLUSTRATION 35-2: Attachment to Form 1120, Schedule J, Showing the Computation of the LIFO Recapture Tax
  • S TERMINATIONS AND CHANGES IN STOCK OWNERSHIP
    • Chapter 36: Termination of S Status
      • Introduction
      • KEY ISSUE 36A Voluntarily Revoking the S Election.
        • Termination by Revocation
        • Revocation Is Made in Statement Form
        • Statement of Shareholder Consent to Revocation
        • Effective Date of Revocation
        • S Election May Be Revoked before It Becomes Effective
        • Checkbox on Form 1120S Is Used to Report Revocation of S Election
        • Filing the Revocation When an LLC Revokes S Status
        • Bankruptcy Trustee May Have Power to Avoid S Revocation
        • Rescission of a Revocation
      • KEY ISSUE 36B Inadvertently Terminating the S Election because of Failure to Qualify as an S Corporation.
        • Events That Terminate S Status
        • Termination Due to Second Class of Stock
        • Effective Date of Termination
        • Disqualifying Event May Be Voluntary or Involuntary
        • Notification to IRS of S Termination
        • Waiver of Inadvertent Termination
        • Pass-through When IRS Waives Termination of the S Election
        • Examples of Inadvertent Termination Waivers
        • Relief from Missed QSST or ESBT Election
        • Relief from Corporation Dissolution under State Law
        • Summary of Procedures for Filing a Letter Ruling
      • KEY ISSUE 36C Involuntarily Terminating the S Election because of Excess Passive Investment Income.
        • Passive Investment Income Test
        • AE&P
        • Passive Investment Income
        • Gross Receipts
        • Termination of the S Election Can Be Avoided by Distributing AE&P
        • Requesting Waiver of Termination because of Excess Net Passive Income
      • KEY ISSUE 36D Passing-through Income and Losses in the S Termination Year.
        • S Termination Year
        • Allocation of Pass-through Items
      • KEY ISSUE 36E Filing Short-year Returns for S Termination Year.
        • Pass-through in Short S Year
        • Due Date for S and C Short-year Returns
        • Obtaining an Extension to File Both Short-period Returns
        • Annualizing C Short-year Income
        • Counting Years for Carryover Purposes
        • Checkbox on Form 1120S to Report S Election Termination or Revocation
        • Balance Sheet Presentation on Form 1120S in Year S Election Terminates
        • Accounting for AAA and AE&P following Termination of S Status
      • KEY ISSUE 36F Taking Advantage of the Post-termination Transition Period.
        • Purpose of Post-termination Transition Period
        • Definition of Post-termination Transition Period
        • Distributions of AAA during the Post-termination Transition Period
        • Election to Distribute AE&P before AAA
        • Balance Sheet Presentation during Post-termination Transition Period
        • Using the Post-termination Transition Period to Deduct Losses
        • Losses Limited by At-risk Basis
      • KEY ISSUE 36G Reelecting S Status after Termination.
        • Five-year Reelection Rule
        • Five-year Waiting Period Applies to QSub Terminations
        • Exceptions to the Five-year Rule
        • Five-year Reelection Rule Applies to a Successor Corporation
        • Carryover Losses after Termination of S Status
        • Carryover of S Corporation Attributes after Termination
      • KEY ISSUE 36H Meeting the Estimated Tax Requirements following Termination.
        • Estimated Tax Payment Requirements
        • Basing C Corporation Estimated Tax on 100% of Prior Year's Tax
        • C Corporation Can Base Its Estimate Payments on the Prior S Year's Tax under Certain Circumstances
        • Estimated Tax Payments When the Prior Year's Tax Exception Does Not Apply
        • No Estimated Tax Payments Required for Short Tax Year Less Than Four Months
      • ILLUSTRATION 36-1: Statement of Revocation of S Election
      • ILLUSTRATION 36-2: Statement of Rescission of Revocation of S Election
      • ILLUSTRATION 36-3: IRS Notification of Termination of S Status
    • Chapter 37: Stock Dispositions
      • Introduction
      • KEY ISSUE 37A Determining Tax Consequences of Sale of S Stock.
        • Basis and Gain or Loss
        • Capital Gain
        • Other Considerations
        • Collectibles Gain
        • Allocating Pass-through upon Complete Disposition of Stock
        • Planning Strategies
      • KEY ISSUE 37B Determining Effect of Various Limitations on Unused Losses.
        • Unused Losses
        • Interaction of Basis, At-risk, and Passive Activity Loss Limitations
      • KEY ISSUE 37C Calculating the Effect of Stock Sale on AAA and PTI.
        • Shareholder's Equity Accounts
      • KEY ISSUE 37D Determining Basis When Stock Is Disposed of by Gift.
      • KEY ISSUE 37E Determining the Effects of Stock Transfer upon the Death of a Shareholder.
        • Death of Shareholder
        • Eligible Shareholders
        • Allocating Pass-through in Year of Death
        • Basis of Decedent's Stock
        • Carryover Losses of the Decedent
        • Suspended Passive Activity Losses of the Decedent
        • Planning Strategies
      • KEY ISSUE 37F Deducting Ordinary Loss on Disposition of Section 1244 Stock.
        • Background
        • Worthless Stock
        • Pass-through Is Applied before Worthless Stock Loss
        • Section 1244 Stock Loss
        • Annual Section 1244 Deduction Limitation
        • Multiple Gains and Losses from Section 1244 Stock
        • Section 1244 Loss Applies Only to Stock Acquired from the Corporation
        • Section 1244 Stock Loss Can Apply to Multiple Purchases of Stock
        • An S Corporation Cannot Own Section 1244 Stock
        • Section 1244 Stock Must Be Issued in Exchange for Money or Property
        • Stock Acquired in Exchange for Debt
        • Shareholder Treatment of NOL Created by a Section 1244 Stock Loss
        • Conversion of LLC to S Corporation
        • Reporting, Recordkeeping, and Disclosure Requirements
        • Shareholder Reporting
        • Shareholder Recordkeeping
        • Corporate Reporting
        • Corporate Recordkeeping
        • Transitional Year
        • Pitfalls to Avoid in Qualifying Stock under IRC Sec. 1244
        • Gross Receipts Test in Year of Loss
        • Checklist
      • KEY ISSUE 37G Recapturing Business Credit upon Disposition of Stock.
    • Chapter 38: Changes in Corporate Capital Structure
      • Introduction
      • KEY ISSUE 38A Election and Reporting Issues for Qualified Subchapter S Subsidiaries.
        • QSubs
        • QSub Election
        • Deemed Liquidation of an Existing Subsidiary
        • Tiered Subsidiaries
        • Built-in Gains Tax
        • LIFO Recapture Tax
        • Effect of the QSub Election
        • Employment Taxes
        • QSubs Treated Separately for Certain Tax Liabilities
        • Excise Taxes
        • Information Returns
        • Special Rules for Banks Apply Separately
        • Special Rules for EINs in Type F Reorganizations
        • Debt of the QSub
        • Organizational Expenditures of the QSub
        • Start-up Expenses
        • Success-based Fees
        • Affiliated C Corporation Subsidiaries Can Join in Filing a Consolidated Return
      • KEY ISSUE 38B Termination of QSub Status.
        • Failure to Meet QSub Requirements
        • Termination Resulting from a Sale of a Portion of the QSub Stock
        • Notifying the IRS
      • KEY ISSUE 38C Relief from Inadvertently Invalid QSub Elections and Terminations.
        • Relief for Late QSub Election When Form 1120S Has Not Been Filed
        • Relief for Late QSub Election When Form 1120S Has Been Filed
        • Relief for a Late QSub Election by the Transferee Parent S Corporation
        • Relief for Late QSub Election When Rev. Proc. 2003-43 or 2004-49 Is Not Available
        • User Fees
      • KEY ISSUE 38D Reporting Redemptions of S Corporation Stock.
        • Redemption Transactions
        • Corporate Recognition of Gain or Loss
        • Allocation of S Corporation Income
        • Effect on Stockholder's Equity Accounts
        • Return Preparation Issues
        • Tax Consequences to a Redeemed Shareholder
        • Constructive Stock Ownership Rules
      • KEY ISSUE 38E Reviewing Reorganizations and Recapitalizations.
        • Tax-free Combinations, Divisions, and Recapitalizations
      • KEY ISSUE 38F Liquidating an S Corporation.
        • Complete Liquidation of a Corporation
        • Corporate Recognition of Gain or Loss
        • Computation and Character of Gain or Loss
        • Partial Liquidation
        • Pass-through Items in the Year of Liquidation
        • Special Tax Break for Distribution of Certain Installment Obligations by an S Corporation in Complete Liquidation
        • Plan of Liquidation
        • Reporting Requirements
        • Other Liquidation Rules
      • ILLUSTRATION 38-1: Filled-in Form 8869 Illustrating a QSub Election
  • ADMINISTRATIVE MATTERS
    • Chapter 39: Tax Years
      • Introduction
      • KEY ISSUE 39A Selecting the Initial Tax Year.
        • Calendar Year
        • Fiscal Year
        • Tax Year Choices for Newly Incorporated S Corporations
        • Tax Year Choices for C Corporations Electing S Status
        • Beginning of First S Corporation Year When C Corporation Elects S Status
        • Importance of Correctly Entering the Fiscal Year on Form 2553
        • Business Purpose Fiscal Years Established by Facts and Circumstances
      • KEY ISSUE 39B Applying for an Automatically Approved Fiscal Year.
        • Automatic Approval Provisions
        • New S Corporations Can Apply for a Fiscal Year on Form 2553
        • When Corporation Is Not Eligible for Automatic Approval of Fiscal Year
        • Natural Business Year--the 25% Test
        • Ownership Tax Year
      • KEY ISSUE 39C Making the Section 444 Election and Required Payments under IRC Sec. 7519.
        • Section 444 Election
        • Filing Form 8716 to Make the Section 444 Election
        • Form 8752, Required Payment or Refund under IRC Sec. 7519
        • Required Payments
        • Applicable Payments
        • Filing the Required-payment Form 8752 for a Newly Incorporated S Corporation
        • Refunds
        • Calendar Year Backup Request
        • Section 444 Backup Election When Business Purpose Year Is Requested
        • User Fee
        • Tiered Structures
        • Termination of Section 444 Election
        • Personal Service Corporation
        • Change to a Calendar Year
        • No Interest Paid on Refund of Required Payments
      • KEY ISSUE 39D Using the Fiscal Year Grandfather Rules.
        • S Corporation Can Continue to Use Fiscal Year under Grandfather Rules
        • Certain 1986 Tax Years Can Be Retained if Required Payments Are Made
      • KEY ISSUE 39E Applying the Short Tax Year Rules.
        • Short Tax Years
        • Depreciation
        • Pass-through to Shareholders
      • KEY ISSUE 39F Changing Tax Years (Existing S Corporations).
        • Tax Year Choices for Existing S Corporations
        • Changing to a Calendar Year
        • Business Purpose Fiscal Years
        • Changing to a Section 444 Fiscal Year
        • Required Payments
        • Changing from One Fiscal Year to Another under IRC Sec. 444
      • KEY ISSUE 39G Changing to a Calendar Year.
        • IRS Permission Not Required
        • Changing to a Calendar Year When S Corporation Is Terminating a Section 444 Election
        • Changing to a Calendar Year When S Corporation Is Not Terminating a Section 444 Election
        • Changing to Calendar Year Causes More Than 12 Months of Pass-through
      • KEY ISSUE 39H Changing Fiscal Year-end before Electing S Status.
      • KEY ISSUE 39I Changing the Fiscal Year-end following Termination of S Status.
        • C Corporations Can Use Fiscal Year
        • Special Procedure Permits Change in Tax Year
        • Filing Form 1128
        • Allocation of Income between S and C Short Years
      • KEY ISSUE 39J User Fee Applies to Certain Business-Purpose Year Applications.
        • Newly Electing S Corporation
        • Existing S Corporation
      • ILLUSTRATION 39-1: Selection of Natural Business Year
      • ILLUSTRATION 39-2: Calculation of Required Payment
    • Chapter 40: Accounting Methods
      • Introduction
      • KEY ISSUE 40A Using the Cash Method of Accounting.
        • Eligibility for the Cash Method of Accounting
        • Accounting Methods of Parent and QSub
        • Cash Method
        • Prepaid Expenses May be Deductible under the 12-Month Rule
        • Prepaid Interest
        • Prepaid Rent
        • Payment Made by Issuing Note
        • Tax Shelters Cannot Use Cash Basis
        • Hybrid Method
        • Cash and Accrual Basis Practice Aid
      • KEY ISSUE 40B Using the Accrual Method of Accounting.
        • Accrual Method
        • All Events Test
        • Economic Performance Rules
        • Safe Harbor--31/2-Month Prepaid Rule
        • Interest and Rent Expense
        • Payment Equals Economic Performance
        • Recurring Item Exception to Economic Performance Rules
        • Deductions Cannot Be Prorated for Purposes of the 31/2-Month Rule or the Recurring Item 81/2-Month Rule
        • Accrual Method S Corporation Can Deduct Certain Prepaid Expenses under 12-Month Rule
        • Change in Accounting Method May Be Required
        • Inventory Requirements Apply to S Corporations Engaged in Production, Purchase, or Sale of Goods
        • Charitable Contributions by Accrual-basis S Corporations
        • Cash and Accrual Basis Practice Aid
      • KEY ISSUE 40C Allowing Small Businesses with Gross Receipts of $1 Million or Less to Use Cash Method.
        • Gross Receipts Test
        • Conformity with the Corporation's Books and Records
        • Benefits of Qualifying for the Cash Method
        • Merchandise at Year-end Cannot Be Deducted
        • Converting to the Cash Method
        • Converting Back to the Accrual Method
        • Converting Accrual to Cash Basis and Vice Versa
      • KEY ISSUE 40D Allowing Certain S Corporations with Gross Receipts of $10 Million or Less to Use Cash Method.
        • Qualifying Taxpayers
        • Average Annual Gross Receipts
        • Treatment of Inventories
        • Converting to the Cash Method
        • Converting Back to the Accrual Method
        • Converting Accrual to Cash Basis and Vice Versa
      • KEY ISSUE 40E Applying the Uniform Capitalization (UNICAP) Rules.
        • Taxpayers Subject to the UNICAP Rules
        • Costs Subject to the UNICAP Rules
        • Interest Capitalization Rules
        • Allocating UNICAP Costs
      • KEY ISSUE 40F Reporting Income from Long-term Contracts.
        • Using the Percentage-of-completion Method
        • Applying the Look-back Method
        • Using the Completed Contract Method
        • Converting Book Income to Tax Income
        • Alternative Minimum Tax (AMT) Implications
        • Built-in Gains Tax Implications
        • Mid-contract Change in Taxpayer
        • Non-long-term Contract Activities
      • KEY ISSUE 40G Applying for Changes in Accounting Methods.
        • Change in Accounting Method
        • Nonautomatic Changes in Accounting Method
        • Taxpayers under Audit
        • Section 481(a) Adjustments
        • Limitations on a Positive Section 481(a) Adjustment
        • Certain Automatic and Nonautomatic Accounting Change Requests Can Be Made on a Single Form 3115
        • Comparing Automatic and Nonautomatic Accounting Method Change Applications
        • Distinguishing Between a Change in Accounting Method and Correction of an Error
      • KEY ISSUE 40H Making Automatic Changes in Accounting Methods.
        • Procedures for Making Automatic Changes in Accounting Methods
        • Filing Form 3115 for an Automatic Change
        • Comparing Automatic and Nonautomatic Accounting Method Change Applications
      • KEY ISSUE 40I Dealing with Accounting Method Changes Initiated by the IRS.
        • IRS Can Require Taxpayer to Change Back to an Impermissible Accounting Method
        • Procedures for Change of Accounting Method When Taxpayer Is under Audit
        • Procedures under Rev. Proc. 2002-18
      • ILLUSTRATION 40-1: Sample Form 3115 Requesting Change in Accounting Method
    • Chapter 41: Filing and Amending Form 1120S, Corporate Audits, and Penalties
      • Introduction
      • KEY ISSUE 41A Filing and Amending Form 1120S.
        • Requirement to Sign and File Form 1120S
        • Electronic Filing
        • Shareholder's Right to Review Form 1120S
        • Extending the Return Due Date
        • Authority to Postpone Certain Deadlines
        • Statute of limitations on Assessment
        • Amending Form 1120S
      • KEY ISSUE 41B Other Return Preparation Considerations.
        • Checklists for Avoiding a Return Preparer Penalty
        • Tax Return Preparation Engagement Letter
        • Other Tax Practice Tools
        • Circular 230 Tax Advice and Preparation Standards
        • Use and Disclosure of Tax Return Information
      • KEY ISSUE 41C IRS Registration and Regulation of Tax Return Preparers.
        • Preparers Required to Obtain a PTIN
        • Definition of a Tax Return Preparer
        • Applying for a PTIN
        • PTIN Renewals for 2012 Filing Season
        • Registered Tax Return Preparers
        • Return Preparation Standards
      • KEY ISSUE 41D Notifying IRS of Inconsistent Treatment of Subchapter S Items.
        • Inconsistent Treatment
        • Schedule K-1 Not Received
      • KEY ISSUE 41E Failing to File or Pay Penalties for Form 1120S.
        • Failure to File and Pay Penalties When Form 1120S Shows Tax Due
        • Failure to Furnish Schedules K-1
        • Failure to File or Furnish Required Information
      • KEY ISSUE 41F Avoiding the Accuracy-related Penalty.
        • Substantial Understatement Penalty
        • Negligence or Disregard of Rules and Regulations
      • KEY ISSUE 41G Avoiding a Tax Return Preparer Penalty.
        • Understanding the Basic and Increased Penalty
        • Who Is a Preparer for Penalty Purposes?
        • Form 1120S Preparer as Preparer of Shareholders' Returns
        • Reasonable Cause and Good Faith
        • Adequate Disclosure
        • Monetary Penalties for Circular 230 Violations
        • Importance of Due Diligence
      • KEY ISSUE 41H S Corporation Audit Issues.
      • ILLUSTRATION 41-1: Reporting Inconsistent Treatment on Form 8082
      • ILLUSTRATION 41-2: Reporting Schedule K-1 Not Received on Form 8082
      • ILLUSTRATION 41-3: Overview of Tax Return Preparer Requirements
      • ILLUSTRATION 41-4: Disclosure of Position Contrary to a Regulation on Form 8275-R
  • QUICK REFERENCE TABLES
    • TABLE T101: Comparison of Corporate and Noncorporate Attributes
    • TABLE T102: Advantages and Disadvantages of Operating as an S Corporation
    • TABLE T103: Comparison of Trusts Eligible to Hold S Corporation Stock
    • TABLE T104: Comparison of QSST and ESBT
    • TABLE T105: Flowchart for Obtaining Relief from a Late S Election
    • TABLE T201: Comparison of Organizational Costs, Start-up Costs, and Ordinary Business Expenses
    • TABLE T301: Interest Rates on Overpayments and Underpayments (2009-2011)
    • TABLE T302: Determination of Applicable Federal Rate (AFR)
    • TABLE T303: 2011 Imputed Interest AFR Tables
    • TABLE T304: Below-market Loans between S Corporations and Their Shareholders
    • TABLE T305: Tax Rates on Capital Gains and Dividends
    • TABLE T401: Employee Treatment of Employer Reimbursements or Allowances
    • TABLE T402: T&E Substantiation Requirements
    • TABLE T403: When Meal and Entertainment Expenses Are Deductible
    • TABLE T404: Deductible Travel Expenses
    • TABLE T405: When the 50% Limit Applies to Meal and Entertainment Expenses
    • TABLE T406: T&E Practice Aids
    • TABLE T501: Explanation of Contribution Limits by Type of Plan
    • TABLE T502: 2011 Contribution Limits by Type of Plan
    • TABLE T601: Standard Mileage Rate Method for Deductions (2011)
    • TABLE T602: Actual Cost Method for Deductions
    • TABLE T603: Deductions for Leased Autos
    • TABLE T604: Summary of Rules for Substantiation and Reporting for Employer-provided Auto
    • TABLE T605: Valuing Personal Use of Employer-provided Auto
    • TABLE T701: Items That Constitute Passive Investment Income
    • TABLE T702: Items That Result in Built-in Gains and Built-in Losses
    • TABLE T801: Claiming the Incremental Research Credit
    • TABLE T802: Claiming the Low-income Housing Credit
    • TABLE T803: Claiming the Disabled Access Credit
    • TABLE T804: Claiming the Investment Credit for Rehabilitation Expenditures
    • TABLE T805: Claiming the Work Opportunity Credit
    • TABLE T806: General Business Credits That Offset Both Regular and Alternative Minimum Tax
    • TABLE T807: Quick Reference to General Business Credit Forms and Dates
    • TABLE T901: Codes for Principal Business Activity
    • TABLE T902: Passive Activity Lines of Business Listing
    • TABLE T1001: Summary of Taxpayer and Return Preparer Penalties
    • TABLE T1002: Meeting the Substantial Authority Test
    • TABLE T1101: Items Affecting Stock Basis, AAA, and AE&P
    • TABLE T1102: Adjustments to Basis, AAA, and AE&P during the Post-termination Transition Period
    • TABLE T1201: Alternative Minimum Tax Adjustments and Preferences
    • TABLE T1202: Summary of Elections to Minimize AMT
    • TABLE T1301: Treatment of Commonly Encountered Items under Cash and Accrual Accounting Methods
    • TABLE T1302: Costs Subject to Capitalization under IRC Sec. 263A
    • TABLE T1303: Summary of Section 1244 Stock Requirements
    • TABLE T1304: Summary of Tax Results under Debt Discharge and Foreclosure Rules for an S Corporation
    • TABLE T1305: Summary of Procedures for Filing a Letter Ruling
  • DEPRECIATION TABLES
    • TABLE D101Recovery Periods for Common Assets
    • TABLE D201 Summary of Regular Tax Depreciation Rules Assets Placed in Service after 12/31/86 (or 7/31/86, if Election Made)
    • TABLE D202 Summary of AMT Depreciation Rules Assets Placed in Service after 12/31/86
    • TABLE D203 Summary of Depreciation Allowable in Year of Disposition
    • TABLE D204 Recap of Required and Elective Depreciation Methods for Both Regular Tax and AMT
    • TABLE D205 Depreciation Recapture
    • TABLE D206 Summary of Section 179 Deduction Amounts
    • TABLE D301 MACRS Personal Property, Half-year Convention
    • TABLE D302 MACRS Personal Property, Mid-quarter Convention--1st Quarter
    • TABLE D303 MACRS Personal Property, Mid-quarter Convention--2nd Quarter
    • TABLE D304 MACRS Personal Property, Mid-quarter Convention--3rd Quarter
    • TABLE D305 MACRS Personal Property, Mid-quarter Convention--4th Quarter
    • TABLE D401 MACRS Residential Rental Property (27.5-year Property)
    • TABLE D402 MACRS Nonresidential Real Property Placed in Service before May 13, 1993
    • TABLE D403 MACRS Nonresidential Real Property Placed in Service after May 12, 1993
    • TABLE D501 Luxury Auto Depreciation Dollar Limits
    • TABLE D502 MACRS Depreciation Rates for Autos
    • TABLE D503 Alternate MACRS (ADS) Rates for Autos
  • TAX ELECTIONS
    • ELECTION E101: Electing S Corporation Status
    • ELECTION E102: Extending the Time to Submit Omitted Shareholder's Consent to S Election
    • ELECTION E103: Extending the Time to Obtain Shareholder's Consent to S Election
    • ELECTION E104: Obtaining IRS Waiver of the Effects of an Invalid or Late S Election
    • ELECTION E105: Reelecting S Status within Five Years of Terminating an S Election
    • ELECTION E106: Treating a Qualified Subchapter S Trust (QSST) as a Permitted Shareholder
    • ELECTION E107: Refusing to Consent to a Qualified Subchapter S Trust (QSST) Election
    • ELECTION E108: Revoking a Qualified Subchapter S Trust (QSST) Election
    • ELECTION E109: Electing Small Business Trust (ESBT) Treated as a Permitted Shareholder
    • ELECTION E110: Treating a Subsidiary as a Qualified Subchapter S Subsidiary (QSub)
    • ELECTION E111: Obtaining IRS Waiver of Effects for Late Shareholder Consents in Community Property States
    • ELECTION E201: Transferor's and Transferee's Disclosure Statements in a Tax-free Incorporation
    • ELECTION E202: Deducting and Amortizing Organizational Expenditures
    • ELECTION E203: Deducting and Amortizing Start-up Expenditures
    • ELECTION E204: Electing to Capitalize Start-up Expenses
    • ELECTION E205: Electing to Capitalize Organizational Expenditures
    • ELECTION E301: Receipt of Restricted Property Treated as Current Compensation
    • ELECTION E401: Expensing Depreciable Property (Section 179)
    • ELECTION E402: Electing the Alternative Minimum Tax (AMT) Depreciation Method for Regular Tax
    • ELECTION E403: Adopting the Alternative Depreciation System (ADS) for Regular Tax
    • ELECTION E404: Electing Out of MACRS Depreciation
    • ELECTION E405: Using Straight-line in Lieu of MACRS Depreciation
    • ELECTION E406: Correcting Prior Years' Depreciation and Amortization Deductions
    • ELECTION E501: Reducing Basis by Items of Loss or Deduction before Nondeductible Expenses and Certain Oil and Gas Depletion
    • ELECTION E601: Electing to Bypass AAA
    • ELECTION E602: Forgoing Previously Taxed Income
    • ELECTION E603: Distributing a Deemed Dividend
    • ELECTION E604: Treating Distributions as Dividends during the Post-termination Transition Period
    • ELECTION E701: Section 59(e) Optional Amortization for Certain AMT Preferences
    • ELECTION E801: Aggregating Passive Activities
    • ELECTION E802: Electing to Adjust Basis for Unused Passive Activity Credits
    • ELECTION E803: Electing Out of the Self-charged Interest Rules
    • ELECTION E804: Treating All Interests in Rental Real Estate Activities as a Single Activity
    • ELECTION E901: Applying Specific Accounting Rules upon Termination of a Shareholder's Entire Interest
    • ELECTION E902: Applying Specific Accounting Rules upon a Qualifying Stock Disposition
    • ELECTION E903: Waiving Family Stock Ownership Attribution Rules and Consenting to Notify the IRS of Any Stock Acquisition Subsequent to Redemption
    • ELECTION E904: Recognizing Section 1244 Ordinary Loss on Stock Disposition
    • ELECTION E1001: Revoking the S Election
    • ELECTION E1002: Notifying the IRS of Termination of S Status
    • ELECTION E1003: Election to Determine Short-period Income Based on Specific Accounting
    • ELECTION E1004: Statement of Revocation of QSub Election
    • ELECTION E1005: Notification of Termination of QSub Status
    • ELECTION E1101: Adopting the Recurring Item Method for Certain Expenses
    • ELECTION E1102: Ratable Accrual of Real Property Taxes
    • ELECTION E1103: Deferring Gain from Involuntary Conversions
    • ELECTION E1104: Deducting Disaster Losses in Previous Tax Year
    • ELECTION E1105: To Request Extension of Time for Making an Election
    • ELECTION E1106: Deferral of Debt Discharge Income Following Repurchase of Debt
  • CHECKLISTS
    • CHECKLIST C101: Form 1120S Overall Due Diligence Review Checklist
    • CHECKLIST C102: Long- form 1120S Preparation Checklist
    • CHECKLIST C103: Short-form 1120S Preparation Checklist
    • CHECKLIST C104: Initial Year Checklist--Form 1120S
    • CHECKLIST C105: Final Year Checklist--Form 1120S
    • CHECKLIST C106: Avoiding a Section 6694 Return Preparer Penalty
    • CHECKLIST C107: Checklist for Preparing Forms 8275 and 8275-R
    • CHECKLIST C201: Eligibility to Elect S Status
    • CHECKLIST C202: Straight Debt Safe Harbor Requirements (Shareholder Debt and the Single-class-of-stock Rule)
    • CHECKLIST C203: Structuring Debt Securities to Be Valid Indebtedness
    • CHECKLIST C204: Checklist for Electing S Status
    • CHECKLIST C301: Factors in Establishing a Profit Motive (Not an all-inclusive list)
    • CHECKLIST C302: Factors Indicating Employee-shareholder Reasonable Compensation
    • CHECKLIST C303: Installment Sale Checklist for Form 1120S
    • CHECKLIST C401: Eligibility for Section 1244 Ordinary Loss Treatment
    • CHECKLIST C501: Domestic Production Activities Deduction
  • WORKSHEETS
    • WORKSHEET W101: Computing Recognized Gain and Distributee Shareholder Basis in a Partially Taxable Incorporation
    • WORKSHEET W201: Gain on Repossession of Real Property and Basis of Repossessed Real Property
    • WORKSHEET W202: Gain on Like-kind Exchanges and Basis of Property Received
    • WORKSHEET W203: Interest Expense Allocation Schedule
    • WORKSHEET W204: Vehicle Mileage Log
    • WORKSHEET W205: Corporate Records Supporting Section 1244 Ordinary Loss Treatment
    • WORKSHEET W206: Tracking M-1 Adjustments (Book-tax Differences)
    • WORKSHEET W301: Section 179 Taxable Income Limitation
    • WORKSHEET W302: Section 179 Carryover Schedule
    • WORKSHEET W303: Depreciation Schedule
    • WORKSHEET W304: Statutory Depletion Carryover Schedule
    • WORKSHEET W305: Oil and Gas Depletion Schedule
    • WORKSHEET W306: Cost Depletion Schedule
    • WORKSHEET W401: Built-in Gains Worksheet (For 2011 Tax Year)
    • WORKSHEET W402: Computing the Tax on Excess Net Passive Income
    • WORKSHEET W403: Computing the Tax for Short-period C Return
    • WORKSHEET W404: Computing the Section 444 Required Payment
    • WORKSHEET W501: Calculation of Basis in Stock and Debt
    • WORKSHEET W502: Calculations of Stock Basis, AAA, OAA, PTI, Retained Earnings, and AE&P
    • WORKSHEET W503: By-activity Information Worksheet
    • WORKSHEET W504: Record of Transfers of S Corporation Stock
    • WORKSHEET W505: Accrual to Cash Worksheet for Form 1120S
    • WORKSHEET W506: Cash to Accrual Worksheet for Form 1120S
    • WORKSHEET W507: Components of Suspended Loss Carryover
  • ADDITIONAL PREPARATION RESOURCES
    • RESOURCE R101: Engagement Letter for S Corporation Return
    • RESOURCE R102: Transmittal Letter for S Corporation Return (No State Returns Included)
    • RESOURCE R103: Transmittal Letter for S Corporation Return (State Returns Included)
    • RESOURCE R104: Transmittal Letter for Schedule K-1
    • RESOURCE R105: Filing Instructions for S Corporation Return
    • RESOURCE R106: Transmittal Letter for S Corporation Tax Organizer (Form 1120S)
    • RESOURCE R107: S Corporation Tax Organizer (Form 1120S)
    • RESOURCE R108: Short Form Tax Organizer
    • RESOURCE R201: Sample Form 2553--Election by a Small Business Corporation
    • RESOURCE R202: Sample Form 8869--Qualified Subchapter S Subsidiary Election
    • RESOURCE R203: Sample Form 1120S--U.S. Income Tax Return for an S Corporation
    • RESOURCE R204: Sample Schedule K-1 (Form 1120S)--Shareholder's Share of Income, Deductions, Credits, etc.
    • RESOURCE R301: New Tax Client Acceptance Form
    • RESOURCE R302: Tax Client Evaluation (Continuance) Form
    • RESOURCE R303: Tax Return Fee Estimate Worksheet
    • RESOURCE R401: Tax Research Request Form
    • RESOURCE R402: Tax Research Documentation Form
    • RESOURCE R403: Tax Information on the Internet
    • RESOURCE R501: Sample Letter on Small Employer Health Insurance Credit
    • RESOURCE R502: Important Business Tax Changes in 2010 Tax Relief Act
  • ROADMAP RM: Roadmap to S Corporation Tax Planning
    • ROADMAP RM-1
      • Introduction
    • ROADMAP RM-2
      • Form 1120S Roadmap--Client Summary Worksheet
    • ROADMAP RM-3
      • Roadmap to Form 1120S and Schedule K-1
    • ROADMAP RM-4
      • Roadmap Guidance
      • ROADMAP RM-4a
        • Section 1: Heading
      • ROADMAP RM-4b
        • Section 2: Income
      • ROADMAP RM-4c
        • Section 3: Deductions
      • ROADMAP RM-4d
        • Section 4: Tax and Payments
      • ROADMAP RM-4e
        • Section 5: Cost of Goods Sold
      • ROADMAP RM-4f
        • Section 6: Schedule B (Other Information)
      • ROADMAP RM-4g
        • Section 7: Schedule K (Shareholders' Pro Rata Share Items)
      • ROADMAP RM-4h
        • Section 8: Schedule L (Balance Sheet)
      • ROADMAP RM-4i
        • Section 9: Schedule M-1 [Reconciliation of Income (Loss) per Books with Income (Loss) per Return]
      • ROADMAP RM-4j
        • Section 10: Schedule M-2 (Analysis of Accumulated Adjustments Account, Other Adjustments Account, and Shareholder's Undistributed Taxable Income Previously Taxed)
      • ROADMAP RM-4k
        • Section 11: Allocation of Pass-through and Basis Adjustment
      • ROADMAP RM-4l
        • Section 12: Income and Loss
      • ROADMAP RM-4m
        • Section 13: Deductions
      • ROADMAP RM-4n
        • Section 14: Credits
      • ROADMAP RM-4o
        • Section 15: Foreign Taxes
      • ROADMAP RM-4p
        • Section 16: Adjustments and Tax Preferences
      • ROADMAP RM-4q
        • Section 17: Shareholder Basis
  • CPE & Training Solutions
  • INDEX
  • Checkpoint PPC Deskbooks Brochure View
  • Checkpoint PPC Deskbooks Brochure View
  • List of Substantive Changes (October 2014) View