Fiscal years are resurrected by RA '87, but required payments put a price on deferral
Article Abstract:
The Tax Reform Act of 1987 Section 444 enables partnerships, S corporations, or personal service corporations (PSCs) to elect a taxable year other than a 'required' taxable year. Electing partnerships and S corporations must make estimated tax payments per Section 7519, and Section 280H limits electing PSCs as to the amount of allowable deductions. The basic rule in the election of an alternate fiscal year is that the 'deferral' period between the end of the new taxable period and the 'required' year is less than three months. The election must be made by the partnership, S corporation, or PSC no later than the later of Apr 30, 1988 or 60 days after publication of forthcoming Temporary Regulations. The election remains in effect until another change. Four tests are made to determine PSC status and compliance with minimum distribution requirements.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
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Fiscal year Regs. create hurdles for electing partnerships, S corporations and PSCs
Article Abstract:
The Tax Reform Act of 1986 required partnerships to adopt the tax year of the majority of the partners. The fiscal year regulations of the Revenue Act of 1987 permit partnerships, 'S' corporations and personal service corporations that are not members of a tiered structure to elect a taxable year other than a required tax year. Guidelines are provided for understanding the complex anti-abuse provisions that govern tax year selection for successor entities, tiered structures, and some trusts. The reactivation of the S election by corporations that elected for C status is also discussed.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
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Temp. regs. show how to elect a fiscal year under 444 and minimize payments
Article Abstract:
Temporary Regulations detail rules by which partnerships, S corporations, and personal service companies (PSCs) may elect a fiscal year under Section 444. Steps needed to make the election, determining required payments for partnership and S corporations as a result of the election, and the effect of the election on a PSC are discussed, and examples are provided. The complexity of the Temporary Regulations is expected to discourage taxpayers from using fiscal years, but the election can be beneficial.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1988
User Contributions:
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