C12-Chp-12-1A-SCorp-Elect-Income-Taxes

C12-Chp-12-1A-SCorp-Elect-Income-Taxes - Chapter 12A S...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 12A. S Corporations C10-Chp-12A-1-SCorp-Elect-Income-Taxes Edited 2010-0221 Howard Godfrey, Ph.D., CPA Professor of Accounting Copyright 2010. Howard Godfrey.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The student should be able to: (This file.) 1. Explain the requirements for being taxed under Subchapter S. 2. Explain the procedures for electing to be taxed under Subchapter S. 3. Identify the events that will terminate an S election. 4. Determine the permitted tax years for an S corporation. 5. Calculate ordinary income and loss. 6. Calculate the amount of any special S corporation taxes.
Background image of page 2
The student should be able to: (2nd file.) 7. Calculate a shareholder's share of ordinary income or loss & separately stated items. 8. Determine the limits on a shareholder's deduction of S corporation losses. 9. Calculate a shareholder's basis in his or her S corporation's stock and debt. 10. Determine the taxability of distributions to its shareholders. 11. Explain the procedures for filing an S corporation tax return. 12. Determine the estimated tax payments required of an S corporation and its shareholders.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
1. Explain the requirements for being taxed under Subchapter S.
Background image of page 4
5 Lecture Outline Should An S Election Be Made? There is no general rule to determine whether an S election should be made. Management and shareholders should examine the long- and short-run advantages and disadvantages of filing as a C corp and as an S corp before making a decision. The election can be revoked or terminated at any time with minimal effort. Disadvantages of S Corp. Some disadvantages also exist when a corp makes an S election.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6 S Corp Requirements. Shareholder-Related Requirements. There can be no more than 100 shareholders. Husband & wife count as 1 person. If stock is owned jointly by more than one person, each is counted as a single shareholder. This single shareholder rule expands to include all members of a family if any family member so elects. Members of a family for this purpose include the common ancestor, lineal descendants of the common ancestor, the spouses (or former spouses) of the common ancestor or lineal descendents.
Background image of page 6
7 Shareholder-Related Requirements. Corps and partnerships in general cannot own S corp stock. Seven types of trusts can own S corp stock--grantor trusts, voting trusts, testamentary trusts, qualified Subchapter S trusts (QSSTs), trusts that distribute all of their income to a single beneficiary, who is treated as the owner of the trust, qualified retirement plan trusts, and small business trusts. An election must be made in order for a trust to be classified as a QSST or a small business trust.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
8 Shareholder-Related Requirements. Organizations that are exempt from the federal income tax under Sec. 501(a) (e.g., a tax-exempt public charity or private foundation) can hold S corp stock. These organizations count as one
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/09/2012 for the course ACCT 6120 taught by Professor Godfrey,h during the Spring '08 term at UNC Charlotte.

Page1 / 52

C12-Chp-12-1A-SCorp-Elect-Income-Taxes - Chapter 12A S...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online