S Corporation Update

Recent developments involving the taxation of S corporations, including the Small Business and Work Opportunity Act of 2007, the Pension Protection Act of 2006, finalized and proposed regulations, and relevant case law are summarized. The Small Business and Work Opportunity Act of 2007 addresses pas...

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Bibliographic Details
Published in:Corporate Business Taxation Monthly 2008-03, Vol.9 (6), p.9
Main Author: Traum, Sydney S
Format: Article
Language:English
Subjects:
Accounting
Administrative expenses
Banking law
Bills
Built-in gains & losses
C corporations
Corporate profits
Court decisions
Electing Small Business Trust
Financial institutions
Investments
Pension Protection Act 2006-US
Qualified subchapter S subsidiaries
Qualified subchapter S trusts
S corporations
Small business
Small Business & Work Opportunity Tax Act 2007-US
Step transaction doctrine
Stockholders
Tax rates
Tax regulations
Taxable income
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Summary:Recent developments involving the taxation of S corporations, including the Small Business and Work Opportunity Act of 2007, the Pension Protection Act of 2006, finalized and proposed regulations, and relevant case law are summarized. The Small Business and Work Opportunity Act of 2007 addresses passive investment income, treatment of bank director shares, and treatment of sale of an interest in a Qualified Subchapter S Subsidiary. The Pension Protection Act of 2006 addresses charitable contributions of donated food inventories and other charitable contributions. Reg. 1.1361-4, dealing with QSubs for purposes of employment taxes and certain excise taxes, was amended on August 16, 2007. Other issues discussed include: 1. final regulations on ESOPs holding stock of S corporations, 2. proposed regulations on basis of shareholder loans to S corporations, and 3. proposed regulations for S corporation banks. Recent law changes provide that for purposes of applying Sections 465 and 469 to the beneficiary of a Qualified Subchapter S Trust with respect to which the beneficiary has made a QSST election, the disposition of S corporation stock by the QSST is treated as a disposition by the beneficiary.
ISSN:1528-5294