SCo: Transactions Between S Corporation and Shareholders (309)

General Description:

This course is designed to identify problems that may arise when a shareholder and an S corporation sell property, loan money, or rent property to each other.

Learning Objectives:

After completing this course the participant will be able to:

• Identify when an S corporation and a shareholder are considered as related within the meaning of §267 and §318 and when each set of attribution rules apply.
• Describe the tax effect of the sale of property to an S corporation and when the gain may be recharacterized as ordinary income and the loss disallowed.
• Describe the tax effect to the shareholder of S corporation accruals.
• Identify how the self-charged interest rules apply to passive activity losses and the 3.8% tax on net investment income.
• Describe the application of the passive loss rules when a shareholder leases property to an S corporation at either a gain or a loss and when the rental will create qualified business income.
• Describe the proper treatment of interest on a loan where the money is used to purchase an interest in an S corporation, and the treatment of interest on money borrowed by the S ­corporation where the loan proceeds are distributed to the shareholder.
• Describe the proper treatment of out-of-pocket expenses which are not reimbursed by the S corporation.
• Summarize the alternatives which are available when a shareholder leases space in his/her residence to the S corporation and the effect of an S corporation shareholder taking a home office deduction.
• Identify the problems that may occur when an S corporation shareholder dies, including the ability to make the equivalent to a §754 election and the effect of income in respect of a decedent (IRD) on the basis of the S corporation stock.

Instructors:

Mark A. Vogel is a retired professor and director of the University of Denver Graduate Tax Program, where for 38 years he taught courses in individual, fiduciary, tax accounting, partnership, and corporate taxation. He is the author of Divorce Taxation Guide (John Wiley & Sons) and Individual Taxation (Shepards/McGraw-Hill). He received a J.D. and LL.M. in Taxation from the University of Denver College of Law and an undergraduate accounting degree from the University of Notre Dame. He is also a CPA licensed in Illinois.

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