Course Information

Course No:  9241022

Course Name:  Corporate Tax Planning

Field of Study:    Tax Law Topic

Course Description:  

This course examines and explains the practical aspects of using the closely held corporation to maximize after-tax return on business operations. Recent developments giving corporations a competitive edge over other entities are explored and detailed. Practitioners are alerted to often missed fringe benefits, retirement planning opportunities, corporate business deductions, income splitting possibilities, and little-known estate planning techniques. The program covers step-by-step tax procedures to form, operate, and ultimately dispose of a closely held corporation. Distinctions between S and C corporations will be unraveled and guidelines for client direction given.

Learning objectives: After completing this section, you should be able to:

  • Specify the advantages and disadvantages of sole proprietorships including self-employed taxes and payment requirements and identify the characterization of sole proprietorship assets upon disposition.
  • Recognize partnerships noting their advantages and disadvantages, identify partnership taxation particularly the application of the passive loss (§469) and at-risk rules (§465).
  • Determine correct partnership income or loss reporting noting husband and wife partnerships and limited partnerships.
  • Identify the reporting requirements of estates, trusts and unincorporated associations.
  • Determine what constitutes a “corporation” from a subchapter S or regular corporation.
  • specify the characteristics of a personal service corporation.
  • Identify the transfer of money, property or both by prospective shareholders and the basic requirements associated with §351.
  • Recognize the requirements of §1244 and the small business stock exclusion.
  • Determine the differences between start-up and organizational expenses and, identify the elements of corporate tax recognition.
  • Specify the requirements for corporate charitable contributions.
  • Identify former §341 collapsible corporations, and determine how to avoid §541 status particularly as to personal service contracts.
  • Identify §531 status and determine accounting periods and methods available to corporations.
  • Identify multiple corporation tax advantages, and the tax consequences of corporate liquidations and distributions.
  • Determine payroll taxes noting the uses of Form 941, Form W-4, Form W-2, and Form W-3, specify the application of FICA and FUTA taxes and how to report them, and identify major employee labor laws.
  • Recognize common-law rules used to determine employee status for FICA and federal income tax withholding, specify the dangers of unreasonable compensation noting how to avoid them, and determine how a corporation can be a valuable income-splitting device.
  • Identify a buy-sell agreement distinguishing an entity purchase from a cross purchase agreement and recognize business recapitalizations and their potential uses.
  • Identify basic fringe benefit planning by determining “income” under §61 and specifying the differences between former nonstatutory and current statutory fringe benefits.
  • Determine “no-additional-cost services” and identify what property or services are excludable from income as qualified employee discounts under §132(c), specify exceptions to working condition fringes and de minimis fringes, recognize a §74 “employee achievement award,” and cite the §79 group term life insurance rules.
  • Recognize the requirements and limits of §129 dependent care assistance, identify §125 “cafeteria plans” noting how they function, specify the §119 meals and lodging exclusion, cite the mechanics of §105 self-insured medical reimbursement plans, and determine the requirements and limits of §127 programs.
  • Identify employer-provided automobiles valuation methods, determine what constitutes interest-free and below-market loans, specify the requirements and limitations of fringe benefits under §§217, 132, 67 212, 132(h)(5) and 280A, cite S corporation fringe benefits, and specify ERISA compliance requirements.
  • Recognize the key tax terms “entertainment”, “lavish” and “extravagant” and, identify the required §162 & §274 tests noting the importance of statutory exceptions.
  • Determine the treatment of ticket purchases including the percentage reduction restriction for meals and entertainment, specify the application of the 2% deduction limit particularly as to business entertainment deductions and determine an “entertainment facility” noting deductible costs.
  • Identify substantiation, recordkeeping, reimbursement, and reporting requirements noting variations in methods and determine how to itemize non-reimbursed employee expenses and specify the special reporting rules for self-employed persons and employers.
  • Recognize the importance and variety of business insurance
  • Identify the impact of the disallowance of the interest deduction on purchasers and the insurance industry noting the §264 interest limitation on policy loans, specify the benefit of corporate key person life insurance, cite the requirements of COBRA, and determine what constitutes a Voluntary Employee Benefit Association under §501(c)(9).
  • Identify nonqualified and qualified deferred compensation plans noting their benefits and contributions limits and recall the current and deferred advantages and disadvantages of corporate plans including fi-duciary responsibilities and prohibited transactions.
  • Specify the requirements of three basic forms of qualified pension plans.
  • Determine the differences between defined contribution and defined benefit retirement plans and specify five types of defined contribution plans noting their impact on retirement benefits.
  • Recognize self-employed plans from qualified plans for other business types and owners.
  • Identify the requirements of IRAs, SEPs, and SIMPLEs, and define tax-free Roth IRA distributions noting strategies to maximize plan benefits.
  • Recognize the postponement of income with a nonqualified plan.
  • Identify the set up of a segregated asset plan where the account is not subject to the claims of the employer’s creditors and still avoids employee taxation and specify the tax consequences of establishing a nonqualified plan.
  • Determine what constitutes a S corporation and specify the advantages and list disadvantages associated with them.
  • Identify variables that impact whether a business can choose S corporation status.
  • Cite ways an S corporation may be terminated noting related procedures to be followed.
  • Recognize the taxation and fringe benefits of S corporations as compared to other entity formats.
  • Recognize various business disposition and reorganization possibilities.

Course Material: Online Material

Program level: Overview

Prerequisites: General understanding of federal income taxation.

Advance preparation: None

Type of delivery method: QAS Self-study

Recommended CPE credits:   21.0

Final examination expiration date:   The program participant will have one year from the date of purchase to complete the course and final examination.