Highlights

Advantages vs. disadvantages of S Corporations -S Corporation Qualifications -Electing S Corporation status - Termination of S Corporation Status -S Corporation Tax on Built-in Gains -S Corporation Pass-Through to Shareholders, Basis and Losses -S Corporation Distributions -Taxable Year of S Corporations -S Corporation Passive Activity Rules, Fringe Benefits, and Other Considerations

Objectives

Identify the advantages and potential disadvantages of operating as an S corporation. -Recognize individuals and entities that are eligible to own S corporation stock. -Determine how to make a proper S corporation election. -Identify causes of voluntary and involuntary termination. -Recall methods of allocating income for the short years caused by a termination. -Calculate the tax on built-in gains. -Identify the items of income, gain, loss, and deduction that adjust basis of shares and indebtedness and the order of application of the items. -Determine how accumulated earnings and profits, accumulated adjustments account, other adjustments account, and the shareholder's basis are affected by distributions. -Recognize when a Section 444 election and resulting required payments should be made. -Determine whether and to what extent passive losses can be deducted against other income. -Identify which fringe benefits are deductible by the shareholders.

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