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21 Cards in this Set
- Front
- Back
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S corp
built in gain tax: when does it apply |
when compoany sells appreciated assets within 10 yrs of S election
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S corp
built in gain tax 1. TR 2. calculate built in gain |
1. corp rate (35%)
2. appreciated value at election - basis = built in gain |
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S corp
tax on excess passive invest. income 1. when does it apply 2. TR & taxed on what 3. what is excluded from passive investment |
1. when invest income >25% of revenue from all sources
2. corp rate(35%) on excess passive invest income 3. excludes Gain on sale/exchange of stocks or securities |
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S corp : pass through item tax treatment
1. capital gains |
taxes at capital gain rates
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S corp : pass through item tax treatment
2. capital losses |
subject to 3,000 max deduct
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S corp : pass through item tax treatment
3. charitable contributions |
subject to limitation ≤50% of AGI
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S corp: pass through item tax trmt
4. interest & div income & related exp |
invest exp deduct to extent of invest income
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S corp: pass through item tax trmt
5. net rent & royalty income |
subject to passive activity loss limitations
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S corp: pass through item tax trmt
6. sect179 deduct |
subject to special annual limit (500G* need to double check)
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S corp: pass through item tax trmt
7. tax credits |
limited to tax liability
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S corp: pass through item tax trmt
8. tax exempt income & related exp |
income - not taxable to s/h
exp - not deduct by s/h |
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S corp: pass through item tax trmt
9. tax pref & adj |
used to compute s/h AMT
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S corp: pass through item tax trmt
loss limitation |
limitation - basis + direct s/h loans - distributions
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S corp
1. S/h intitial basis of S corp stock 2. after initial basis |
1. initial = cash + basis of property contributed
2. initial + share of income(-or loss) - distribut received = basis |
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distribut received - explain
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they are a return of capital
not taxed to the s/h |
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distribut - S corp w. no C corp E&P
tax result & trmt of: 1. to extent of basis of stock 2. in excess of basis of stock |
1. not taxable
- reduces basis in stock trmt: return of capital |
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distribut - S corp w. no C corp E&P
2. in excess of basis of stock |
taxed as LT capital gain ( if stock held > yr)
trmt: capital gain distribution |
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distribut - S corp w. C corp E&P
1. to extent of AAA |
not subject to tax, reduces basis in stock
trmt: S-corp(already taxed) profits |
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distribut - S corp w. C corp E&P
2. to extent of C corp E&P |
taxed as dividend, doesnt reduce basis in stock
trmt: old c-corp taxable div |
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distribut - S corp w. C corp E&P
3. to extent of basis in stock |
not taxable, reduces basis in strock
trmt: return of capital |
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distribut - S corp w. C corp E&P
4. excess of basis in stock |
taxed as LT cap gain
trmt: cap gain distribut |
