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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 175 ||| Word Count: 11,1733 ||| Review Questions: 125 ||| Final Exam Questions: 105 |
| CPE Credits : | 21.0 |
| IRS Credits : | 21 |
| Price : | $133.95 |
| Passing Score : | 70% |
| Course Type: | NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents |
| Technical Designation: | Technical |
| Primary Subject-Field Of Study: | Taxes - Taxes for Course Id 1401 |
| Description : | This course examines and explains the practical aspects of using a closely held corporation to maximize after-tax return on business operations. Recent developments giving corporations a competitive edge over other entities are explored and detailed. Practitioners are alerted to often missed fringe benefits, retirement planning opportunities, corporate business deductions, income splitting possibilities, and little-known estate planning techniques. The program covers step-by-step tax procedures to form, operate, and ultimately dispose of a closely held corporation. Distinctions between S and C corporations will be unraveled and guidelines for client direction given. |
| Usage Rank : | 15000 |
| Release : | 2024 |
| Version : | 1.0 |
| Prerequisites : | General understanding of federal income taxation. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
Corporate Tax
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 16-Aug-2024 |
| NASBA Course Declaration : | Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam. |
| Approved Audience : | NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - 1401 |
| Keywords : | Taxes, Corporate, Tax, Planning, v14, cpe, cpa, online course |
| Learning Objectives : |
As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 1 Business Forms & Characteristics At the start of Chapter 1, participants should identify the following topics for study:
* Partnerships * Estates & trusts * Unincorporated associations * Corporation defined * Subchapter S corporations * Ordinary “C” corporations * Personal service corporations * Corporate tax rate After reading Chapter 1, participants will be able to:
2. Recognize partnerships and their advantages and disadvantages, identify partnership taxation particularly the application of the passive loss (§469) and at-risk rules (§465), and determine correct partnership income or loss reporting stating the role of husband and wife partnerships and limited partnerships. 3. Identify the reporting requirements of estates, trusts, and unincorporated associations, determine what constitutes a “corporation” for a subchapter S or regular corporation, specify the characteristics of a personal service corporation, and recognize the repeal of the alternative minimum tax for regular corporations. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 2 Corporate Formation & Capitalization At the start of Chapter 2, participants should identify the following topics for study:
* Start-up & organizational expenses * Tax recognition of the corporate entity * Capital gains & losses * Dividends received deduction * Charitable contributions * Accumulated earnings tax trap * Accounting periods & methods * Inventories * Multiple corporations After reading Chapter 2, participants will be able to:
2. Recognize the requirements of §1244 and the small business stock exclusion, determine the differences between start-up and organizational expenses, and identify the elements of corporate tax recognition including the dangers of corporate ownership and capital gains and losses stating dividends received treatment. 3. Specify the requirements for corporate charitable contributions, and determine how to avoid §541 status particularly as to personal service contracts. 4. Identify §531 status and determine accounting periods and methods available to corporations. 5. Specify methods for identifying inventory items including common methods of valuing inventory and, identify multiple corporation tax advantages and the tax consequences of corporate liquidations and distributions. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 3 Corporate Principals & Employees At the start of Chapter 3, participants should identify the following topics for study:
* FICA & FUTA * Employee labor laws * Employee v. contractor status * Unreasonable compensation * Income splitting * Buy-sell agreements * Entity & cross-purchase agreements * Sole shareholder planning * Recapitalization After reading Chapter 3, participants will be able to:
2. Recognize common-law rules used to determine employee status for FICA and federal income tax withholding, specify the dangers of unreasonable compensation stating how to avoid them, and determine how a corporation can be a valuable income-splitting device. 3. Identify a buy-sell agreement distinguishing an entity purchase from a cross-purchase agreement and recognize business recapitalizations and their potential uses. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 4 Basic Fringe Benefits At the start of Chapter 4, participants should identify the following topics for study:
* No-additional-cost services & qualified employee discounts * Working condition fringes * Employee achievement awards * Dependent care assistance * Cafeteria plans * Self-insured medical reimbursement plans * Employer-provided automobile * Interest-free & below-market loans * Fringe benefit plans for S corporations After reading Chapter 4, participants will be able to:
2. Determine “no-additional-cost services” and identify what property or services are excludable from income as qualified employee discounts under §132(c), specify exceptions to working condition fringes and de minimis fringes, recognize a §74 “employee achievement award,” and cite the §79 group term life insurance rules. 3. Recognize the requirements and limits of §129 dependent care assistance, identify §125 “cafeteria plans” specifying how they function, specify the §119 meals and lodging exclusion, cite the mechanics of §105 self-insured medical reimbursement plans, and determine the requirements and limits of §127 programs. 4. Identify employer-provided automobiles valuation methods, determine what constitutes interest-free and below-market loans, specify the requirements and limitations of fringe benefits under §§217, 132, 67 212, 132(h)(5) and 280A, cite S corporation fringe benefits, and specify ERISA compliance requirements. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 5 Business Entertainment At the start of Chapter 5, participants should identify the following topics for study:
* Statutory exceptions * Pre-2018 ticket purchases * Percentage reduction for meals * Entertainment facilities * Substantiation & record keeping * Employee expense reimbursement & reporting * Self-employed persons * Employers After reading Chapter 5, participants will be able to:
2. Determine the former treatment of ticket purchases, recognize the percentage reduction restriction for meals, specify the application of the former 2% deduction limit, and determine an “entertainment facility” stating related deductible costs. 3. Identify substantiation, recordkeeping, reimbursement, and reporting requirements recognizing variations in methods, and determine how to itemize non-reimbursed employee expenses and specify the special reporting rules for self-employed persons and employers. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 6 Insurance At the start of Chapter 6, participants should identify the following topics for study:
* Group term life insurance * Regulations * Retired lives reserve * Split-dollar life insurance * Medical & dental insurance & disability income insurance * Interest limitation on policy loans * Key person life insurance * COBRA * VEBAs - §501(c)(9) Trusts After reading Chapter 6, participants will be able to:
b. Determining corporate uses for life insurance including estate, travel, and accident uses and specifying the tax treatment, reporting requirements, and discrimination rules for business insurance particularly the §79 requirements for group insurance; c. Identifying the benefit of not needing a medical examination as a prerequisite to purchasing a plan; d. Recognizing retired lives reserve and split-dollar life insurance stating their mechanics, taxation regulation, and advantages and disadvantages; e. Specifying the mechanics of employer-paid health, medical, and disability income insurance including the impact of medical examination requirements. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 7 Retirement Plans At the start of Chapter 7, participants should identify the following topics for study:
* Basic requirements of a qualified pension plan * Basic types of corporate plans * Types of defined contribution plans * Self-employed plans - Keogh * Distribution & settlement options of IRAs * Tax-free rollovers for IRAs * Roth IRAs * Simplified employee pension plans (SEPs) * SIMPLE Plans After reading Chapter 7, participants will be able to:
2. Specify the requirements of three basic forms of qualified pension plans. 3. Determine the differences between defined contribution and defined benefit retirement plans and specify five types of defined contribution plans stating their impact on retirement benefits. 4. Recognize self-employed plans from qualified plans for other business types and owners. 5. Identify the requirements of IRAs, SEPs, and SIMPLEs, and define tax-free Roth IRA distributions specifying strategies to maximize plan benefits. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 8 Nonqualified Deferred Compensation At the start of Chapter 8, participants should identify the following topics for study:
* Purposes & benefits * Constructive receipt * Economic benefit * Funded company account plan * Segregated asset plan * Tax consequences * Accounting * Estate planning considerations After reading Chapter 8, participants will be able to:
b. Specifying deferred compensation patterns set forth in R.R. 60-31 stating the taxability of each; and c. Determining unfunded and funded plans and the use of company assets or bookkeeping accounts to avoid employee taxation. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 9 S Corporations At the start of Chapter 9, participants should identify the following topics for study:
* S corporation status * Termination * Income & expense * Built-in gain * Passive income * Basis of stocks & debts * Distributions * Form 1120S * Fringe benefits After reading Chapter 9, participants will be able to:
2. Identify variables that impact whether a business can choose S corporation status. 3. Cite ways an S corporation may be terminated specifying related procedures to be followed. 4. Recognize the taxation and fringe benefits of S corporations as compared to other entity formats by:
b. Identifying the benefits available to other entity formats, determining S corporation owner compensation and distribution options recognizing reasonable compensation requirements, related party rules, S corporation distribution taxation, tax year choices, fringe benefits, and specifying when the Form 1120S must be filed. As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 10 Business Dispositions & Reorganizations At the start of Chapter 10, participants should identify the following topics for study:
* Buying an existing business * Reorganization types * Carryover of corporate tax attributes After reading Chapter 10, participants will be able to:
b. Identifying advantages of purchasing an existing business over starting a new business, citing ways to find a business that is for sale, and specifying the tax considerations of such an acquisition; c. Specifying a reorganization under §368(a)(1) recognizing the types of transactions that qualify as non-taxable reorganizations; and d. Identifying the factors that determine the corporate tax attributes of an acquired corporation that carry over to the acquiring or successor corporation. |
| Course Contents : | Chapter 1 - Business Forms & Characteristics Sole Proprietorships Advantages Disadvantages Self-Employment Taxes Incorporation “S” Solution Estimated Tax Payments 20% Deduction Partnerships Conduit Entity Advantages Disadvantages Husband-Wife Partnerships General Tax Aspects Limited Partnerships Passive Presumption At-Risk Rules - §465 Financing Passive Loss Limitations - §469 Active/Passive Determination Triggering Suspended Losses Limited Liability Companies Estates & Trusts Income Distribution Business Trusts Unincorporated Associations Corporate Treatment Corporation Defined Effect of State Laws Corporate Characteristics Partnership Determinations Trust Determinations Professional Associations Check-The-Box Regulations Subchapter S Corporations Ordinary “C” Corporations Advantages Disadvantages Personal Service Corporations - §441, §448, §469 Testing Period Personal Services Principal Activity & Substantial Performance Employee-Owner Independent Contractor Passive Loss Limitations - §469(a)(2) Qualified Personal Service Corporation - §448 Federal Corporate Income Taxation Overview Taxable Income Allowable Deductions Tax Credits Corporate Tax Rates Tax Tables Current Rate - 21% Capital Gains & Losses Tax Return & Filing Affiliated Group Corporate Estimated Tax Alternative Minimum Tax Reinstatement of AMT for Larger Corporations - §55(b)(2) Chapter 2 - Corporate Formation & Capitalization Incorporation - §351 Basic Requirements Corporate Nonrecognition Property Stock Solely For Services Impact on Recipient Impact on Other Shareholders Stock for Debt Stock Notes Control Property Basis Stock Basis Liabilities Miscellaneous Trade & Technical Corrections Act - §351 Recourse Liability Nonrecourse Liability Basis Incorporation of a Partnership Alternative #1 Alternative #2 Alternative #3 Tax Consequences - Alternative #1 Tax Consequences - Alternative #2 Tax Consequences - Alternative #3 Accounts Receivable Continuing Partnership Section 1244 Stock Maximum Ordinary Loss Original Issuance Distributed Stock General Requirements Start-Up Expenses Covered Expenses Amortization Organizational Expenses Definition Stock Issuance & Syndication Expenses Amortization Start of Business Tax Recognition of the Corporate Entity Tax Criteria Nominee & Agency Corporations Having Income Attributed to the Corporation Section 482 Reallocation Corporation & Shareholder Goodwill Interest-Free Loans Section 269A Capital Gains & Losses Net Capital Loss Carryovers & Carrybacks - §1212 S Corporation Status Asset Types Five-Step Characterization Process Netting Capital Gains Netting Section 1231 Gains (Losses) Character of Section 1231 Gains (Losses) 5 Year Averaging NOL Carryback & Carryover - §172 Loss Computation Deduction Computation Dividends Received Deduction - §243 Dividends from Domestic Corporations 65% Exception Ownership Limitation Denial of Deduction Debt-Financed Portfolio Stock Property Dividends Holding Period Focus Charitable Contributions - §170 Timing of Deduction Limitation Carryover of Excess Contribution Personal Holding Companies - §541 Penalty Tax Professional Corporations Named Professionals Avoidance of PHC Status Accumulated Earnings Tax Trap - §531 Imposition of Penalty Tax Computation Accumulated Earnings Credit Application of Credit to Controlled Groups Reasonable Accumulations Working Capital Service Corporations Minority Stock Redemptions Majority Stock Redemptions Stockholder Harmony Tax Exempt Income Accounting Periods & Methods Accounting Periods Section 444 Election Business Purpose Tax Year 25% Test Length of Accounting Period Short Tax Year Not in Existence Entire Year Change in Accounting Period Election of Accounting Period Changing Accounting Periods Changes Without IRS Consent Accounting Methods Methods Available Cash Method Limitation Accrual Method Economic Performance Rule Special Methods Combination (Hybrid) Method Accounting for Long-term Contracts Changing the Accounting Method Inventories Identification Methods Specific Identification Method FIFO Method LIFO Method Valuation Methods Cost Method Uniform Capitalization Rules - §263A Lower of Cost or Market Method Multiple Corporations Controlled Group Restrictions Definition Parent-Subsidiary Groups Brother-Sister Groups Consolidated Returns Definition Corporate Liquidations & Distributions The Old General Utilities Doctrine Loss Limitations Chapter 3 - Corporate Principals & Employees Employee Status of Active Shareholders Payroll Tax Withholding & Reporting Form 941 Deposit Rules Lookback Period Monthly Depositor Semi-Weekly Depositor One-Day Rule Form W-4 Form W-2 Form W-3 Social Security’s Payroll Tax or FICA - §3111 & §3121 Rates Federal Unemployment (FUTA) Tax - §3301 & 3306 Form 940 Employee Labor Laws Minimum Wage Requirement Overtime Fair Employment Laws Child Labor Laws Immigration Law Workers’ Compensation Insurance State Disability Insurance (SDI) OSHA Employee vs. Contractor Status Factors Unreasonable Compensation Overall Limitation Allowance of Deduction Publicly Traded Corporation Limitation Limitation on Accrual Deduction Employment Contracts Scope of Examination Officer’s Compensation Factors Employee’s Qualifications Size of the Business Employee’s Compensation History Unreasonably Low Salaries Services Performed by the Employee Past Service Reasonable Dividends Bonuses as Constituting Dividends Payback Agreements Miscellaneous Factors Income Splitting Gift & Redemption Hire the Kids & Spouse Buy Sell Agreements Definition Professional Corporations Marketability Problems Controlled Disposition Entity & Cross-Purchase Agreements Stepped-Up Basis Resulting Equity Ownership Attribution & Constructive Ownership Rules Estate Tax Valuation Using the Buy-Sell Agreement to Set Value Section 2703 Restrictions Exceptions to §2703 Arms-Length Bargain Enforcement of Contract Price Joint Ownership Funding the Buy-Sell Agreement Term vs. Whole Life Policy Ownership Premium Payment Purchase Price S Corporations Sole Shareholder Planning Complete Liquidations Alternative Dispositions Use of Life Insurance Estate Valuation One-Way Buy-Outs Recapitalization In General Valuation of Stock Estate Freeze Provisions Stock Dividends Section 306 Tainted Stocks §306 Exceptions Chapter 4 - Basic Fringe Benefits Concept Definition of Income - §61 Deductions without Taxable Income Benefit Mechanics Discrimination No-Additional-Cost Services - §132(b) Covered Employees Line of Business Requirement Definition Qualified Employee Discounts - §132(c) Manner of Discount Real Estate & Investment Property Exclusion Amount of Discount Working Condition Fringes - §132(d) Covered Employees Exceptions Substantiation De Minimis Fringes - §132(e) Subsidized Eating Facilities Employee Achievement Awards - §74(c) & §274(j) Exclusion Definition of Employee Achievement Awards Qualified Plan Award Employer Deduction Limits Aggregation Limit Special Partnership Rule Employee Impact Group Term Life Insurance - §79 Dependent Care Assistance - §129 Amount of Assistance Requirements Conflict with Dependent Care Cafeteria Plans - §125 Definition Qualified Benefits Non-Qualified Benefits Controlled Group Rules Salary Reduction Plans Nondiscrimination Meals & Lodging - §119 Income Exclusion Convenience of Employer Self-Insured Medical Reimbursement Plans - §105 Allowable Expenses Requirements Benefits Exposure Employee Educational Assistance Programs - §127 Employer-Provided Automobile - §61 & §132 General Valuation Method Annual Lease Value Method Computation Cents Per Mile Method Commuting Value Method Interest-Free & Below-Market Loans - §7872 Permissible Discrimination Employee Needs Imputed Interest Types of Loans Demand Loans Term Loans Application of §7872 and Rate Determinations Summary Moving Expenses - §217 Employer-Provided Retirement Advice & Planning - §132 Financial Planning - §67 & §212 Popularity Taxation Tax Planning - §67 & §212 Taxation Estate Planning - §67 & §212 On-premises Athletic Facility - §132(j)(4)(B) Home Office - §280A Carryforward Renting Space to Employer Fringe Benefit Plans for S Corporations Insurance Basis Permanent Policies Effect of Premium Payment Key Employee Insurance Medical Insurance Retirement Plans Summary ERISA Compliance Welfare Plans Additional Requirements Chapter 5 - Business Entertainment Entertainment Statutory Exceptions - §274(e) Food and Beverages for Employees Expenses Treated as Compensation Reimbursed Expenses Recreational Expenses for Employees Employee, Stockholder, and Business Meetings Trade Association Meetings Items Available to the Public Entertainment Sold to Customers Expenses Includible in Income of Non-employees Lavish or Extravagant Restriction Ordinary & Necessary Requirement Business Meals Percentage Reduction for Meals - §274(n)(1) Application of Reduction Rule Eating Facilities Exceptions - §274(n)(2) Entertainment Facilities Exceptions Covered Expenses Club Dues Sales Incentive Awards Substantiation & Record Keeping - §274(d) Travel Expense Items to be Substantiated Meal Expense Items to be Substantiated Business Gifts Expense Substantiation Substantiation Methods Adequate Records Exceptions to Documentary Evidence Requirement Sufficiently Corroborated Statements Exceptional Circumstances Retention of Records Exceptions to Substantiation Requirements Payback Agreements Employee Expense Reimbursement & Reporting Unreimbursed Employee Expenses Reimbursed Employee Expenses Accountable Plans Business Connection Reasonable Period of Time Fixed Date Safe Harbor - #1 Period Statement Safe Harbor - #2 Adequate Accounting Per Diem Allowance Arrangements Federal Per Diem Rate Related Employer Restriction Usage & Consistency per Employee Unproven or Unspent Per Diem Allowances Reporting Per Diem Allowances Reimbursement Not More Than Federal Rate Reimbursement More Than Federal Rate Nonaccountable Plans Self-Employed Reimbursement & Reporting Expenses Related to the Self-Employed's Business Reimbursed Expenses Incurred on Behalf of a Client With Adequate Accounting Without Adequate Accounting Employers When Can an Expense Be Deducted? Economic Performance Rule Nondeductible Meals Employer-Provided Auto Chapter 6 - Insurance Company Paid Insurance Popularity Types of Life Insurance Group Term Life Requirements “Key Employee” Defined Popularity and Application Coverage & Premiums Medical Examination Regulations Spouse & Dependent Insurance Computation Tax Liability Reporting Discrimination Eligibility & Benefits Excluded Employees Policy Requirements Ten Employee Rule Less Than Ten Employees Permanent Benefits Nondiscrimination Requirements Retired Lives Reserve Revenue Ruling 68-577 Taxation Advantages Comparison With Other Programs Executive Bonus Split-Dollar Disadvantages Reserve Account Revenue Rulings Qualified Trusts Nonqualified Trusts Deductibility of Contributions Separate Account for Key Employees Disqualified Benefit Effective Date Revenue Procedure 93-3 Estate Planning Considerations Policy Assignments Split Dollar Life Low-Cost Term Insurance Regulatory Requirements Taxation Revenue Ruling 64-328 Johnson Case Business Travel Accident Insurance Medical & Dental Insurance Premiums Disability Income Insurance Interest Limitation on Policy Loans - §264A Disallowance of Interest Deduction Impact Limit on Deductibility of Premiums & Interest Key Person Life Insurance Closely Held Corporations Sole Shareholder Applications COBRA Affected Employers VEBAs - §501(c)(9) Trusts Section 419 Self Insurance Severance Pay Post-Retirement Medical Benefits VEBA Taxation on Earnings Nondiscrimination Rules Applied Uniform Application Controlled Groups Termination Disqualified Benefits Conclusion Chapter 7 - Retirement Plans Deferred Compensation Qualified Deferred Compensation Qualified v. Nonqualified Plans Major Benefit Current Deduction Timing of Deductions Part of Total Compensation Compensation Base Salary Reduction Amounts Benefit Planning Corporate Plans Advantages Current Deferred Disadvantages Employee Costs Comparison with IRAs & Keoghs Basic ERISA Provisions ERISA Reporting Requirements Fiduciary Responsibilities Bonding Requirement Prohibited Transactions Additional Restrictions Fiduciary Exceptions Loans Pandemic Provisions Employer Securities Excise Penalty Tax PBGC Insurance Sixty-Month Requirement Recovery Against Employer Termination Proceedings Plans Exempt from PBGC Coverage Basic Requirements of a Qualified Pension Plan Written Plan Communication Trust Requirements Permanency Exclusive Benefit of Employees Highly Compensated Employees Reversion of Trust Assets to Employer Participation & Coverage Age & Service Coverage Percentage Test Ratio Test Average Benefits Test Numerical Coverage Related Employers Vesting Full & Immediate Vesting Minimum Vesting Nondiscrimination Compliance Contribution & Benefit Limits Defined Benefit Plans (Annual Benefits Limitation) - §415 Defined Contribution Plans (Annual Addition Limitation) - §415 Limits on Deductible Contributions - §404 Assignment & Alienation Miscellaneous Requirements Basic Types of Corporate Plans Defined Benefit Mechanics Defined Benefit Pension Defined Contribution Mechanics Discretion Favorable Circumstances Types of Defined Contribution Plans Profit-Sharing Requirements for a Qualified Profit-Sharing Plan Written Plan Eligibility Deductible Contribution Limit Substantial & Recurrent Rule Money Purchase Pension Cafeteria Compensation Plan Thrift Plan Section 401(k) Plans Death Benefits Defined Benefit Plans Money Purchase Pension & Target Benefit Plans Employee Contributions Non-Deductible Life Insurance in the Qualified Plan Return Universal Life Compare Plan Terminations & Corporate Liquidations 10-Year Rule Lump-Sum Distributions Asset Dispositions IRA Limitations Self-Employed Plans - Keogh Contribution Timing Controlled Business General Limitations Effect of Incorporation Mechanics Parity with Corporate Plans Figuring Retirement Plan Deductions For Self-Employed Self-Employed Rate Determining the Deduction Individual Plans - IRAs Deemed IRA Mechanics Phase-out Special Spousal Participation Rule - §219(g)(1) Spousal IRA Eligibility Contributions & Deductions Employer Contributions Retirement Vehicles Distribution & Settlement Options Pandemic Provisions Life Annuity Exemption Minimum Distributions Pandemic Provisions Required Minimum Distribution Definitions Required Minimum Distributions During Owner’s Lifetime Required Minimum Distributions in Year of the Owner's Death Beneficiaries - Distributions after Owner’s Death Estate Tax Deduction Charitable Distributions from an IRA Post-Retirement Tax Treatment of IRA Distributions Income In Respect of a Decedent Estate Tax Consequences Losses on IRA Investments Prohibited Transactions Effect of Disqualification Penalties Borrowing on an Annuity Contract Tax-Free Rollovers Rollover from One IRA to Another Waiting Period Between Rollovers Partial Rollovers Rollovers from Traditional IRAs into Qualified Plans Rollovers of Distributions from Employer Plans Withholding Requirement Waiting Period Between Rollovers Conduit IRAs Keogh Rollovers Direct Rollovers From Retirement Plans to Roth IRAs Rollovers of §457 Plans into Traditional IRAs Rollovers of Traditional IRAs into §457 Plans Rollovers of Traditional IRAs into §403(B) Plans Rollovers from SIMPLE IRAs Roth IRA - §408A Eligibility Contribution Limitation Roth IRAs Only Roth IRAs & Traditional IRAs Conversions Recharacterizations Reconversions Taxation of Distributions No Required Minimum Distributions Simplified Employee Pension Plans (SEPs) Contribution Limits & Taxation SIMPLE Plans SIMPLE IRA Plan Employee Limit Other Qualified Plan Set up Contribution Limits Salary Reduction Contributions Employer Matching Contributions Deduction of Contributions Distributions SIMPLE §401(k) Plan Chapter 8 - Nonqualified Deferred Compensation Postponement of Income Advantages IRS Scrutiny & Approval Nondiscrimination ERISA Funding No Immediate Cash Outlay Annual Report Notice Requirement Purposes & Benefits Benefit Formula Incentive Deferred Bonuses Contractual Arrangement Necessary Provisions Tax Status Service’s Position Rationale Congressional Moratorium No Ruling or Regulation Policy Constructive Receipt Beyond Actual Receipt Simple Set-Asides Are Not Possible Revenue Ruling 60-31 Regulations Time & Control Concept Control Timing After-the-Fact Contract Amendment to Existing Contract Economic Benefit Has Something of Value Been Transferred? Insurance Coverage Has a Calculable Value Segregated Funds Have Immediate Economic Value Value v. Control Revenue Ruling 60-31 Situation 1 Situation 2 Situation 3 Situation 4 Situation 5 General Principles Unfunded Bare Contractual Promise Plan - Type I Risk Funded Company Account Plan - Type II Ownership & Segregation Bookkeeping Reserve or Separate Account Employee Still Bears Economic Risk Limited Protection Investment of Deferred Amounts Life Insurance Premiums Third Party Guarantees Segregated Asset Plan - Type III Section 83 Approach Tight Rope Format Transferable or Not Subject To A Risk of Substantial Forfeiture Substantial Restrictions Redemption or Forfeiture Condition Related to a Purpose of the Transfer Noncompetition Consultation Time Alone is Not Enough Realization & Taxation 30-Day Election Period Deduction Allowed Timing Withholding Tax Consequences Reciprocal Taxation/Deduction Rule No Difference between Cash or Accrual Separate Accounts for Two or More Participants Employer Deduction Traps Income Tax on Employer Held Assets Inclusion in Income Under §409A State Tax Issues Accounting Two Sets of Rules Financial Accounting Rules IRS Rules Estate Planning Considerations Death During Deferral Income Tax Consequences Estate Tax Consequences Gift Tax Consequences Withholding, Social Security & IRAs Other Payroll Taxes Social Security Benefits IRAs Chapter 9 - S Corporations Introduction Advantages Planning Disadvantages Passthrough Entities - 20% Deduction Becoming an S Corporation S Corporation Status Number of Shareholders Individuals Only Estates Grantor Trusts Voting Trusts Testamentary Trust Qualifying Simple Trusts Electing Small Business Trusts Aliens C Corporations Tax-Exempt Entities Exception for S Corporation ESOP - §512 One Class of Stock Affiliated Groups & Subsidiaries Prior Law Current Law Domestic Corporation Election Requirement Making the Election Form 2553 Invalid S Elections Extension S Corporation Termination Revoking the Election Procedure Effective Date Ceasing to Qualify Effective Date Passive Income - §1362 Effective Date S Termination Year Pro-Rata Allocation Allocation Based On Normal Accounting Rules Annualization of 1120 Short Year Taxation of S Corporations S Corporation Income & Expense Separately Stated Items Nonseparately Stated Items Interest Expense on Debt-Financed Distributions Tax Exempt Income Net Operation Losses Carryover of C Corporation NOLs Reduction of Pass-Thru Items Built-In Gain - §1374 Net Recognized Built-In Gain Recognized Built-In Gains Recognized Built-In Loss Deduction Items Amount of Tax Credits Net Operating Loss Carryovers Treatment of Certain Property Transfer of Assets Passive Income - §1375 Gross Receipts Sales or Exchanges of Stock or Securities Passive Investment Income Royalties Rents Interest Figuring the Tax on Excess Net Passive Income Net Passive Income Excess Net Passive Income Special Provisions Waiver of Tax Tax Preference Items LIFO Recapture Tax Capital Gains Tax Reducing Corporate Capital Gains Figuring Corporate Taxable Income Recapture of Investment Credit Estimated Corporate Tax Payments Basis of Stock & Debts Adjustments to Basis Limitation on Loss Deductions Basis Limit Adjustments to Stock Basis Increases Decreases Adjustments to Debt Basis Restoring Basis of Loans Loan Repayments Guarantees At-Risk Rules - §465 Reasonable Compensation Related Party Rules Definition of Related Party Stock Attribution Rules Business Expenses & Interest Distributions Earnings & Profits Accumulated Adjustments Account (AAA) Dividend Election Post-Termination Distributions Transition Period Order of Distribution No Earnings & Profits Appreciated Property Distributions Taxable Year Business Purpose Change of Tax Year Form 1120S Extension Late Filing Reasonable Cause Schedule K-1 Shareholder’s Treatment Of S Corporation Items Pro Rata Share Optional 10-year Write-Off of Tax Preferences Fringe Benefits Health Insurance Premiums Reporting Requirements Medical Deduction Entity Tax Comparison Chapter 10 - Business Dispositions & Reorganizations Starting a New Business Organization Costs Start-up Costs Syndication Costs Buying an Existing Business Finding a Business for Sale Tax Considerations Stock Acquisitions Section 338 Election Asset Acquisitions Allocation of Purchase Price to Assets Allocation Regulations Practical Considerations Reorganizations - §368 Types of Reorganizations Type 1 Reorganizations Benefits and Considerations Boot Limitation Type 2 Reorganizations 80% Control Requirement Voting Stock as Sole Consideration Shareholder Action Type 3 Reorganizations Consideration Transfer of Assets 90/70 Test Liquidation of Acquired Corporation Type 4 Reorganizations Asset Distributions Continuity of Business Boot Type 5 Reorganizations Type 6 Reorganizations Type 7 Reorganizations Bona Fide Business Purpose Test Carryover of Corporate Tax Attributes Mandatory Carry-Over Effect of Carry-Over on Acquisition Application of Rules to Subsidiary Liquidations Loss or Tax Credit Carryovers Glossary |
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