In the dynamic field of S corporation taxation, professionals face the challenge of understanding complex scenarios that span multiple tax years, involving losses, gains, and various shareholder interests. This CPE class offers a comprehensive exploration of these challenges through a practical two-year case study.
The first part of the study delves into a year of losses, highlighting the treatment on the corporation and each shareholder, and detailing the preparation of crucial tax forms and schedules for 2021. The second part shifts to a year of income, demonstrating how previous losses can be offset, and includes the complexities of acquiring another S corporation. This hands-on approach provides participants with deep insights into preparing and understanding forms such as Form 1120-S and shareholder Form 7203, calculating stock and debt basis limitations, and managing built-in gains tax. By the end of this online CPE course, participants will be adept at handling a range of S corporation tax situations, enhancing their capability to advise clients and manage corporate tax responsibilities effectively.
Learning Objectives
Upon completion of this course, participants will be able to:
Prepare Form 2553, which is the only acceptable method to elect S corporation status;
Apply current rules to Form 1120-S, its attached schedules and the information the corporation must provide the shareholders, including Schedule K-2 and Schedule K-3;
Calculate the corporate election to close the books on a substantial disposition, and a shareholder election regarding the ordering of deductible and nondeductible items in a loss year;
Calculate the effects of the business interest limitation on the loss passed through to the shareholders;
Prepare other forms and schedules, including Form 1120-S, Schedule D and Schedule M-3, Forms 4797, 8949, 8824 and 8990;
Determine stock and debt basis limitations applicable to shareholders;
Calculate the shareholder basis information on Form 7203, including income, losses and carryovers;
Determine the effects of the amount at risk, passive activity loss and excess business loss limitations on shareholder deductibility of losses passed through from the S corporation;
Calculate the built-in gains tax carryover;
Understand the procedures and forms necessary for a Section 338(h)(10) election for the acquisition of an S corporation by another S corporation;
Prepare Form 8869, to elect Qualified Subchapter S Subsidiary status for an acquired corporation;
Calculate the corporate election to close the books on a substantial disposition, and a shareholder election regarding the ordering of deductible and nondeductible items in a loss year;
Apply current rules to Form 1120-S, its attached schedules and the information the corporation must provide the shareholders, including Schedule K-2 and Schedule K-3;
Prepare other forms and schedules, including Form 1120-S, Schedule D and Schedule M-3, Forms 4797, 8949, 8824 and 8990;
Determine stock and debt basis limitations applicable to shareholders;
Calculate the shareholder basis information on Form 7203, including income, losses and carryovers;
Determine the effects of the amount at risk, passive activity loss and excess business loss limitations on shareholder deductibility of losses passed through from the S corporation; and
Calculate the built-in gains tax, including carryover provisions.
