Understanding S Corporation Taxation: Late S Corporation Elections, Disproportionate Distributions, and Selling Share

Overview

S corporation taxation has a lot of pieces. There are helpful elections you can make that can potentially save your client money, but there are also rigid rules to adhere to. For example, if there is more than one class of stock, it can terminate the S corporation election. Learning how to successfully navigate these rules can make all the difference. In this course, we will discuss some of the more common specialty areas experienced by practitioners - late filing relief for S corporation elections, disproportionate distributions, and selling S corporation shares. While these items may not come up on every single Form 1120-S, you will be able to add more value to clients when they do.

Prerequisites

Basic understanding of tax rules for flow-through entities

Objectives

• Recall the rules for a late S corporation election
• Identify the tax implications of an S corporation making disproportionate distributions to S corporation shareholders
• Recognize the tax rate applicable to the sale of S corporation shares

Highlights

• Making an S corporation election and late filing relief
• Disproportionate distributions
• Selling S corporation shares
• Redemption rules