S&C: Closely Held Corporation Problems for S and C Corporations

General Description:

Seminars in the S & C Corporation Series cover tax topics that apply to both S and C corporations (under §1371(a), the same rules that apply to a C corporation also apply to an S corporation and its shareholders, except where they are inconsistent). Tax advisors will become aware of the problems that often arise when a shareholder of either a C or S corporation deals with his/her corporation.

Learning Objective:

After completing this course the participant will be able to:

• Analyze the compensation problems for both a C corporation and an S corporation and illustrate when there might be too much or too little compensation.
• Describe the situations where losses are disallowed and gain may be recharacterized as ordinary income.
• Define §1244 stock.
• Illustrate the practical use of §1202 stock.
• Determine when income or gain is subject to the 3.8% tax on net investment income.
• Compute self-charged interest; describe tax effect of below-market or no-interest loans.
• Determine the character of interest where funds are borrowed to purchase an interest or make a capital contribution.
• Describe the treatment of unreimbursed travel and entertainment expenses and the deductibility of qualified transportation fringe benefits.
• Distinguish between a business and nonbusiness bad debt when a shareholder loan becomes worthless.
• Describe the tax effect of guarantees of corporate debt by a shareholder or leasing a home office to the corporation, and how the passive loss rules apply to a C corporation and an S corporation.
• Illustrate the problems with capitalizing a corporation with debt or equity.
• Explain how the COD rules apply to a C corporation and an S corporation.
• Describe the situations when a corporation might be subject to the personal holding ­company tax.

Instructors:

Mark A. Vogel is a retired professor and director of the University of Denver Graduate Tax Program, where for 38 years he taught courses in individual, fiduciary, tax accounting, partnership, and corporate taxation. He is the author of Divorce Taxation Guide (John Wiley & Sons) and Individual Taxation (Shepards/McGraw-Hill). He received a J.D. and LL.M. in Taxation from the University of Denver College of Law and an undergraduate accounting degree from the University of Notre Dame. He is also a CPA licensed in Illinois.

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