Reviewing S Corporation Tax Returns: What Are You Missing?

Overview

The complexity of S corporation tax law creates a formidable challenge to the tax practitioner for accurate compliance and reporting of their client's S corporation activities. Join us as we discuss the common errors practitioners make on S corporation tax returns that are often missed by review staff. The intent is to sharpen skills for reviewers by examining case studies and discussing issues where additional information from the client may be warranted and areas of tax law where proper treatment requires additional analysis and information. Multiple issues will be discussed including income, deductions, K-1 reporting, and K-2 and K-3 reporting. This course follows a highly illustrative case study format to increase participant comprehension and retention.

Prerequisites

Basic knowledge of S corporation income taxation

Objectives

• Identify common mistakes made on S corporation tax returns.
• Determine strategies to avoid making mistakes on S corporation tax returns.
• Determine how transfers to corporations in exchange for stock can be nontaxable under IRC Section 351.
• Calculate the balance in an accumulated adjustments account and enter that calculation on Form 1120S, Schedule M-2.
• Determine how capital gains and losses are disclosed on Form 1120S.
• Identify and properly report cost recovery deductions on Form 1120S and the associated Schedule K-1s issued to shareholders.
• Determine the tax consequences when a newly converted S corporation sells appreciated property it acquired while operating as a C corporation.
• Determine the tax consequences associated with the distribution of appreciated property by an S corporation to a shareholder in redemption of stock.

Highlights