Hands-On Tax Return Workshop - S Corporations (Form 1120S)

Prerequisites

None

Highlights

• Extensive review of the S corporation income tax laws with an emphasis on any new legislative
• Schedule K analysis– determine if income statement items are separately (i.e. schedule K) or non-separately stated income and expense items
• Discuss how schedule K items get allocated to shareholders on their schedule K-1s
• Look at detailed Schedule K-1 information reporting to shareholders needed for the qualified business income (QBI) deduction, 3.8% net investment income tax and business interest expense limitations
• Talk about the unreasonably low officer compensation issues
• Learn the special tax treatment of fringe benefits paid to 2% shareholders and family members
• Schedule M-1 – calculate the reconciliation of income or loss per books with income or loss per income tax return
• Schedule M-2 – detailed step-by-step calculation of the AAA, PTI, E&P and OAA accounts
• Basic overview of the tax treatment of distributions including when a S corporation has prior C corporation earnings and profits (E&P)
• Review the importance and basics of calculating a shareholder’s stock and debt basis
• Basic overview of the potential S corporation built in gains tax from the conversion of a C to S corporation

Objectives

• Prepare a complete Form 1120S income tax return and related schedules with minimal review points
• Understand the S corporation income tax law from a tax-form perspective and become more knowledgeable with the information gathering process (i.e. asking the right questions)

Preparation

None