S&C: Formation of S and C Corporations (402)

General Description:

Seminars in the S & C Corporation Series cover tax topics that apply to both S and C corporations (under §1371(a), the same rules that apply to a C corporation also apply to an S corporation and its shareholders, except where they are inconsistent). The participant will become aware of the problems and pitfalls to avoid when property is transferred to a corporation in exchange for an interest in the corporation (a §351 transfer).

Learning Objectives:

After completing this course the participant will be able to:

• Describe the tax effects if an LLC "checks the box."
• Describe the basic requirements under §351 when property is transferred to a corporation in exchange for an interest in the corporation.
• Define the term "property" for §351 transfers.
• Define the term “debt” and identify strategies to use to avoid debt in excess of basis.
• Determine the treatment of boot in a §351 transfer and when gain is recognized on a §351 transfer and illustrate the most common situation where gain is recognized when forming a corporation or advising an LLC to check the box to make an S election.
• Define the term "accommodation transferor."
• Apply the control test for §351.
• Determine the shareholder’s basis in stock received and the corporation’s basis in the property received in a §351 transfer.
• Determine the holding periods for property transferred and the stock received.
• Explain the recapture provisions and disposition of an installment obligation in a §351 transfer.
• Illustrate how to treat boot in the form of an installment note.
• Calculate depreciation on the property transferred in a §351 transaction.

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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