S Corporation Taxation Concepts and Planning Strategies: Part 1

Author: James R. Hamill

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2025 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

The most popular form of business entity is the S corporation. S corporations create special reporting and transactional issues because they follow the “entity” approach applicable to all corporations. The tax result can be a combination of provisions found in subchapter C and subchapter S. For this reason, although both partnerships and S corporations are flow through entities, the tax result of similar transactions can be very different in the two entity types. This course is “Part I” of a two-part program on the taxation of S corporations and their shareholders. This course will review many of the basic provisions of subchapter S and will help prepare both staff and management for dealing with more complex tax concepts applicable to both S corporations and their shareholders. In this four-hour course, nationally recognized tax expert and instructor James Hamill, CPA, Ph.D., will explain the taxation of S corporations by use of commonly encountered transactions. The course will generally follow a “life cycle” approach, beginning with a review of what “entity” concepts mean and then leading into the formation of an S corporation. It will then begin to address common transactions that S corporations engage in during their “lives.”

Publication Date: December 2023

Topics Covered

• S Corporation Classification
• Entity Status
• S Corporation Eligibility
• Types of permitted shareholders
• Eligible Trusts
• Entity Ownership
• Single Class of Stock
• Debt or Equity?
• Election Mechanics
• Election Due Date
• Late Elections
• Relief Provisions - General
• Disregarded Entities
• Single Member LLC
• LLC as an S Corporation
• QSub
• Simplifying Tax Reporting
• Forming an S Corporation
• 351(a) Shareholder Relief
• S Corporation Payroll Tax
• 2005 Treasury Recommendations and IRS Response
• General Reporting Rules PTE-to-owner
• Passthrough Entity Activity Grouping: Section 469 (PAL)
• Aggregation: Section 199A (QBID)
• Reporting: Section 199A
• Corporate-Level Taxes and Change of Status
• C-to-S Conversions
• Anti-Abuse Issues
• Built-in-Gains Tax
• BIG Mechanics
• Passive Income Tax (1375)
• S-to-C Conversions
• Post-Termination Transition
• Special 2017 Act Provision

Learning Objectives

• Determine the consequences of forming an S corporation
• Identify key tax reporting issues
• Describe how to select an accounting period
• Identify how to articulate allocations of profit and loss
• Determine how to structure liabilities to create basis
• Recognize how to explain the rules affecting S corporation distributions
• Describe the entity approach and why it matters
• Identify how many levels of tax S Corporations have
• Identify the form that should be used to elect S Corporation status
• Identify at what percent a penalty tax is imposed in regards to passive income tax

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
None

Advance Preparation
None