Legal Updates & Commentary for Tax & Estate Planning
Material Participation by S Corp. Trusts
Since the enactment of the “material participation” test, as part of the passive activity loss (“PAL”) rules, in 1986, the IRS has issued very little guidance on how the test applies to trusts. Neither the Code nor the Regulations are helpful.
When the IRS issued proposed regulations for the…
While the S corporation has a number of shortcomings, it historically has offered the best means for avoiding corporate level tax on the sale of business assets, provided the sale occurs beyond the corporation’s built-in gain recognition period. A recent development provides yet another advantage for an S corporation over a C corporation: an…
