2553 CCH Part 1
What is form 2553?
Election by a small business corporation to elect to be treated as an S corp for Federal tax purposes
Section 351, general rule?
No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control as defined by section 368 of the corporation.(unless boot)
K1
How many classes of stock can an S corp have?
one!
LLC in California that does not make S election files what form with the State?
Form 568
This is the term for cash or other non-stock property received in a section 351 exchange, which CAN trigger tax
Boot!
Two ways to allocate income between buyer and seller (irreverent if everyone owns same amount of shares all year)
2 Closing of boods (requires election)
Small business taxpayer methods have 2 requirements, name one
1. Meet small business gross receipts test
trailing 3 year ave annual gross receipts under 29m
includes all business under common control
2. Can't be a "tax shelter"
Maximum amount of shareholders an S corp can have?
100
Section 351 allows certain transfers of property to a corporation to be tax-free, what percent of ownership control is needed immediately after the exchange?
80%
What was the court case referenced in CCH in regards to substituting shareholder note for an s corps note?
Gilday v Commissioner
401k deferral amounts for under or over age of 50, name either
1. 22.5k
2.30k
When can you make a 2553 election?
No later than 2 months and 15 days after the beginning of the tax year election is to take effect.
Non recourse liability, what is this?!
A type of liability where none of the shareholders bears the economic risk of loss.
An S corporation owner in this type of business may face limitation on deductions for QBI, Qualified business income, under section 199A, what is it?
A specified service trader or business STTB
S corporation under the age of 50 earns 100k w2 from ABC S corp where he is the sole shareholder - maximum they can contribute (not deferral) into their 401k plan? (2023)
25k (25%)
What is the Rev Proc for late elections, 2553?
Rev Proc 2013-30
If basis of debt is greater than the basis of assets contributed with the debt, gain is recognized. What section is this?
IRC 357(c)
K-2 K-3 Exemptions?
No foreign activity
shareholder notified by S corp when k1 furnished to shareholder
no k3 requests by shareholder prior to 1 month before 1120s filed. (incentive to file early)
This is an IRS schedule that is used by S corps to reconcile the beginning and ending balances of their retained earning's and to report changes due to other factors like distributions and net income.
Schedule M-2