Recent changes broaden opportunities for S corporations
Article Abstract:
The US Congress passed the Small Business Job Protection Act of 1996 in August of that year. It includes a handful of significant revisions to the S corporation rules which have been undermining the viability of small businesses, a sector that is recognized as having a profound impact on employment. Under this new legislation, the number of shareholders that can own stock in an S corporation is raised from jut 35 to 75, thereby enabling S corporations to raise more capital. Moreover, it removes the provision preventing S corporations from becoming a member of an affiliated group, which had disabled S corporations from owning 80% or more of another corporation. Other areas touched by the new act are elections and terminations, distribution rules, and basis and losses. These provisions should make S corporations a more attractive entry choice for business owners.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1996
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Notices explain elections for S corporations
Article Abstract:
The IRS has released interim guidance on elections for S corporations. Notice 97-3 focuses on how the accounting period can be updated for a corporation attempting to engage in an S election. The corporation must be qualified to change its yearly accounting period under the Regulation or the Revenue Procedure. On the other hand, Notice 97-4 discusses a procedure for making a qualified subchapter S subsidiary (QSSS) election. An S corporation holding 100% of a subsidiary's stock can make a QSSS election for the subsidiary. Finally, Notice 97-5 centers on the consequence of a QSSS election if the subsidiary is a bank. Tax professionals should familiarize themselves with these notices to avoid unexpected problems.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1997
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Circuits disagree as to shareholder limitation periods
Article Abstract:
The Eleventh Circuit of the Court of Appeals has ruled that a deficiency assessment can be filed against a shareholder of an S corporation even if the limitations period of the corporation has expired. In 'Fehlhaber,' the Eleventh Circuit countered the Ninth Circuit's decision in 'Kelley.' Like the Second Circuit in 'Bufferd,' the Eleventh Circuit ruled that the statute of limitations applies at the entity level. The Ninth Circuit in 'Kelley' and the Eight Circuit in 'Fendell,' on the other hand, contends that the limitations period is ascertained at the shareholder level.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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