Takeaway: While S corporations can be an effective means to reduce FICA taxes, the form of the arrangement must be consistent with the taxpayer’s intended reporting position(s). The S corporation, not the S corporation’s employee-shareholder, must be in control of the receipt of income in order shift income from the shareholder’s personal income tax return…
This post is a primer on the federal income tax effects of adding a new member to a limited liability company (“LLC”) that goes from a single member limited liability company (“SMLLC”) to a two member LLC. These effects include the conversion of the LLC being treated as a disregarded entity (“DRE”) to a partnership…
Can you help your client obtain a “step-up” in a stock purchase? As a tax adviser, you may have been confronted with the following scenario: your client (P) is buying 100% of the stock of a corporation (T) from seller (S), but the purchase price far exceeds T’s basis in its assets. Since P…
