Right about now, many of you are probably saying “Not again,” or “not another,” in reaction to the title of this post. I suspect that, for many of you, this is the umpteenth article you’ve encountered on the “S vs C” saga[i] that was reinvigorated following the enactment of the Tax Cuts and Jobs
Taxable M&A and the Unwanted Asset
By Farrell Fritz P.C. on
Posted in Federal
Under One Roof
I sometimes wonder at the number of corporations that own real property.
It is often the case that the property is the corporation’s principal asset, which it leases to one or more commercial tenants, for example. That’s bad enough.[i]
There are other instances, however, in which the corporation is engaged in…
S Corp. Shareholder to Tax Court: “Here’s Why I Deserve These Loss Deductions”
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
A post earlier this year considered the basis-limitation that restricts the ability of S corporation shareholders to deduct their pro rata share of the corporation’s losses. It was observed that, over the years, shareholders have employed many different approaches and arguments to increase the basis for their shares of stock or for the corporation’s indebtedness,…
C Corp-to-S Corp: It “Pays” To Be The Last In and First Out?
By Farrell Fritz P.C. on
Posted in Federal Tax Issues
Tax-Free? Not Quite.
In general, a C corporation may achieve pass-through treatment for income tax purposes, without triggering immediate income or gain recognition, by electing to be treated as an S corporation.
One caveat to this general rule, however, is the so-called “LIFO Recapture” rule. Under IRC Sec. 1363(d), an electing C corporation that…