S corporations: eligibility to elect and taxation of capital gains subject of new regs

Article Abstract:

Under the Tax Reform Act of 1986, the tax rates for corporations will exceed those for individuals; as a result, the use of Subchapter S incorporation has increased in importance. New regulations have been proposed which amplify the definition of an S corporation, and Final Regulations concerning capital gains and income taxes for S corporations have been released. These regulations are explained. A tax is imposed on the income of an S corporation when it has Subchapter C profits and earnings at the end of a taxable year and more than 25 percent of its gross receipts are in the form of passive investment income. A tax is imposed on the capital gains of an S corporation if the net capital gain exceeds $25,000 and 50 percent of the corporation's income in a taxable year in which the corporation's taxable income exceeds $25,000.

S corporations, Capital gains tax

---

How to evaluate the tax consequences of the various forms of holding property jointly

Article Abstract:

Joint ownership of property requires tax analyses in the areas of gift, income, and estate taxes. Also, consideration must be made on the form of joint ownership, the parties in the relationship, the nontax elements, and the various properties under scrutiny. A tax shelter's limited partnership interest is an additional asset under which joint ownership must be examined carefully. When one of the joint property owners is a non-spouse, major estate and gift tax problems can result such that this type of ownership is not advantageous to either party.

Accounting and auditing, Property taxes, Intangible property, Intangible assets, Property tax

---

Parties intent upheld: no value to noncompete pact

Article Abstract:

The Tax Court has determined that when the transaction parties do not, on purpose, allocate some part of the purchase price to the non-competition accord, it could not revise the agreement to do so. The case, Patterson, TCM 1985-53, it compared the situation to one in which the parties do not agree on the sum that must be allocated. The agreement not to compete is valid when the purchaser considers the value of the purchased business to be in danger when the seller acts to reenter the same line.

Cases, Acquisitions and mergers, Partnership, Partnerships, Income tax, Tax courts

Similar abstracts:

• Abstracts: The criminal liability of directors. Duties of directors. New powers, new duties
• Abstracts: S corporations owned by ESOPs present tax exemption opportunity
• Abstracts: A CSP technique-based interactive control panel layout. Ergonomics modelling and evaluation of automobile seat comfort
• Abstracts: Life cycle and the adoption of consumer financial innovation: an empirical study of the adoption process. Financial innovation, balance sheet cosmetics and market response: the case of equity-for-debt exchanges in banking
• Abstracts: Inactive Corp. could not deduct officer's salary. The deductibility of travel expenses: practical applications of the rules

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.