News & Updates

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Corporate Capital Gains and Losses: An Overview and Interest on Unrecorded Mortgage Wasn’t Deductible

Corporate Capital Gains and Losses: An Overview This newsletter discusses the tax treatment of a C corporation’s capital gains and losses. The treatment of capital gains and losses for C corporations is different from the treatment of such items for

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Recognition of Same-Sex Marriage for Federal Tax Purposes

Some clients have inquired as to the tax treatment of same-sex spouses now that the Supreme Court has struck down the provision of the Defense of Marriage Act that treated same-sex spouses as unmarried under federal law. This newsletter briefly

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Executive Compensation Plans for S Corporations

Incentive Compensation Stock Options 1. Nonqualified Stock Options. Instruments granted by the corporation to the employee, giving the employee the right to purchase corporate stock at a designated price through some future date. Under IRC §83(e)(3), options are not taxed

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S Corporations and Fringe Benefits

In the S corporation context, the Internal Revenue Code substantially limits the availability of many fringe benefits that are available to shareholder-employees of C corporations. The limitations apply to benefits provided to shareholder-employees who are “2-percent shareholders.” These 2- percent

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Corporate Level Taxes Imposed on S Corporations

There are several circumstances in which corporate level taxes may be imposed on S corporations. LIFO Recapture A C corporation that elects to become an S corporation and used the LIFO method of inventory accounting for its last year before

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Reasons for Electing S Corporation Status — Planning Considerations

In evaluating the opportunities for using S corporations, it is useful to divide the historical reasons for using subchapter S into five broad, sometimes overlapping, categories. The first involves the limited use of S corporation status by shareholders to obtain

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Converting from a C to an S Corporation

Advantages of Operating as an S Corporation One level of tax on earnings with increase in shareholder basis for undistributed earnings. Avoidance of double tax upon sale or liquidation of business. Alternative minimum tax not applicable to S corporations. Pass-through

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Checklist of Items to Improve Tax Consequences of Business Purchase and Sale

Despite the repeal of the General Utilities doctrine as a part of TRA ’86, taxpayers currently experience an overall better tax situation for most transactions involving the purchase or sale of a business than before that repeal. The General Utilities

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Purchase of Assets vs. Purchase of Stock

Whether the taxable acquisition of a corporate business is cast in the form of a purchase of assets or a purchase of stock can have strikingly different tax, as well as non-tax, consequences for the buyer of the business. It

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Taxable Acquisition vs. Tax-Free Reorganization

In structuring the purchase and sale of a corporate business, one of the most important decisions which must be made is whether to cast the transaction in the form of a taxable purchase (of stock or assets) or a tax-free

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