TCP: T3M1

Advanced S-corp topics

lifo recapture, built in gains, passive investment income

what are the three corporation level taxes that an s-corp might be subject to

excess of inventory in fifo vs lifo

how much is taxed with the lifo recapture tax

4

how many payments do you make with the lifo recapture tax

final c-corp return & first 3 s-corp years

when do you pay the lifo recapture tax

5

within how many years do you need to sell appreciated property in order to have to pay the built-in gains tax

recognized BIG for the year, total net BIG in election year, taxable income if still c-corp

the BIG tax calc is 21% of the lesser of what

lesser of: net income or excess passive investment income

what amounts are you paying the passive investment income tax on

s-corp has accumulated c-corp e&p; passive investment income = >25% total receipts

what two things must be true for a company to be subject to the tax on passive investment income

debt basis

when both debt basis and stock basis has been depleted which do you reinstate first

non recourse debt

what type of debt is not included in at risk basis calculations

per-share per-day basis

how are allocations made to s-corp shareholders

distributions

what can not make the AAA account go negative

AAA

previously undistributed income stored in this account can be withdrawn tax free

ordinary income, separately stated income, gain items

what can make AAA increase

ordinary business losses, separately stated losses and deductions, nondeductible expenses, distributions

what can make AAA decrease

OAA

keeps record of things not included in the AAA account

tax exempt income and related expenses and federal taxes attributable to the c-corp

what are the three things that OAA includes that AAA does not include

AAA, OAA, return of capital, cap gain

what is the order of distributions to shareholders when there is not a previous c-corp

AAA, E&P, OAA, return of capital, cap gain

what is the order of distributions to shareholders when there is a previous c-corp with unused E&P

gains go to basis and AAA before the distribution

what do we have to look for when doing an s-corp property distribution

shareholder stock basis

what do distributions from AAA also take from

c-corp liquidation

what is an s-corp liquidation the same as