Section 306 may reduce or eliminate deduction for a gift to charity
Article Abstract:
TAM 8930001 holds that the deduction for donations of Section 306 stock to charity is the fair market value of the stock less the amount that would be treated as ordinary income from its sale. Section 306 provides for ordinary income treatment for certain qualifying stock if the amount realized would have been a dividend had the corporation distributed cash rather than stock There is no extension of exceptions to the policy for charitable donations. The application of ordinary income treatment can be avoided if the distribution of the stock is not part of a plan to avoid income tax. Taxpayers must establish that the transaction is not to avoid Federal income tax.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1989
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Determining extent and nature of gain on repayment of S corp. debt to shareholder
Article Abstract:
Multiple loans and partial repayment confuse the determination of the stockholder's status in a loan to an S corporation. The nature of the gain, such as ordinary or capital, is usually not a determinative, and when it is, its results will usually surprise the shareholder-taxpayer. Below-market loans allow for a free tax advantage to the stockholder under the Deficit Reduction Act.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1985
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