Understanding S Corporation Taxation: Shareholder Basis, AAA, and Retained Earnings (SCB2)

Overview

You could pay $0 for this course!

This course qualifies for EA/IRS and CFP credit. If you need EA/IRS credit, please contact Tyler Dion (tdion@masscpas.org) after you have registered and provide him your PTIN number.

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. Given the rising popularity of S corporations, understanding how shareholder basis and the equity section of the balance sheet work together for tax purposes is imperative for nearly any tax practitioner. In this course, we will discuss this relationship. Using examples and illustrations, we will show how contributions, operating transactions, and distributions affect shareholder basis as well as equity.

This course qualifies for reimbursement through the state’s Workforce Training Express Fund. Firms/companies with fewer than 50 staff can be reimbursed up to 100% of the cost of training and firms/companies with 50-100 employees can be reimbursed up to 50% of the cost of training. You must register for the course and apply for reimbursement through the Workforce Training Express Fund website a minimum of three weeks prior to the start of the course. The course code for this program is C-12955. To learn more, click here or contact Julia Ekelund at jekelund@masscpas.org.

Highlights

S corporation earnings layers Observations on earnings layers S corporation basis calculation IRC 351 transactions Four loss tiers Appreciated property distributions

Prerequisites

None

Designed For

CPAs and tax practitioners who work with S corporation business clients and S corporation shareholders

Objectives

Recognize the formula for calculating S corporation shareholder basis Identify the items of income and deduction that are allocated to AAA, PTI, AE&P, and OAA Calculate the tax effects of a distribution on shareholder basis and AAA