Surgent's Understanding S Corporation Taxation: Compensation Issues and Entity-Level Taxes

Overview

Even though they have been around for several years, the tax laws pertaining to S corporations remain some of the more difficult areas of the Internal Revenue Code. In this course, we will examine how S corporations break away from the normal tax rules for flow-through entities. We will explore which employee benefits are disallowed for S corporation shareholders, as well as which taxes are assessed at the entity level. Finally, we will discuss how state level taxation may have changed permanently with the addition of PTE elections.

Highlights

Reasonable compensation
Fringe benefits for S corporation shareholders
Built-in gains tax
Excess passive income tax
Notice 2020-75: PTE elections

Prerequisites

None

Designed For

Tax and financial advisors with clients who have formed S corporations

Objectives

Recognize the factors to consider when evaluating the reasonableness of S corporation shareholder compensation
Recall which fringe benefits will result in additional W-2 income for S corporation shareholders
Calculate the built-in gains tax and excess passive income tax
Identify the federal income tax implications of a PTE election at the state level