Corporate Taxation
Edition: 3
Copyright: 2020
Pages: 336
Edition: 3
Copyright: 2020
Pages: 336
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Corporate Taxation addresses important issues regarding the formation, operation, and liquidation of C corporations and S corporations.
In particular, this text covers topics such as:
- contributing property and services to a corporation
- determining a shareholder’s tax basis in the corporation
- selecting a corporation’s taxable year
- computing a corporation’s taxable income
- structuring taxable and tax-free corporate acquisitions and divisions
- understanding affiliated groups and the consolidated return regulations
- handling nonliquidating and liquidating distributions
- the impact of flow-through treatment on the corporation and shareholders
This text includes review problems at the end of each chapter to strengthen the reader’s understanding of important concepts and the application of the law to particular transactions. Ultimately, after studying this text, the reader should have a valuable understanding of the taxation of both C corporations and S corporations.
About the Author
PART 1 CORPORATE FORMATION
Chapter 1 Selecting a Business Entity
A. Sole Proprietorship
B. General Partnership
C. Limited Partnership
D. Limited Liability Partnership
E. Limited Liability Limited Partnership
F. Limited Liability Company
G. Corporation
H. Tax Treatment of Business Entities under the Check-the-Box Regulations
I. Qualified Joint Ventures between Married Persons
J. Obtaining an Employer Identification Number (EIN)
Chapter 2 Transfer of Property to a Corporation
A. C Corporations in General
B. Review of Terminology Used in Sales or Exchanges
C. Nonrecognition of Gain or Loss by Transferor of Property to a Controlled Corporation
D. Transfers of Property Encumbered by Liabilities
E. Determining a Shareholder’s Initial Tax Basis in the Stock Received
F. Nonrecognition of Gain or Loss by the Corporation
G. Determining the Corporation’s Initial Tax Basis in the Assets Received
H. The Shareholder’s Initial Holding Period in the Stock Received
I. The Corporation’s Initial Holding Period in the Assets Received
J. Transfers to Corporations with Pre-Existing Shareholders
K. The Transfer of Services and the Impact on the “Control” Requirement
L. Contribution of Depreciable Assets
M. Special Rule for “Investment Companies”
N. Transfer of Services to a Corporation in Exchange for Stock
Chapter 3 A Corporation’s Capital Structure and Other Formation Issues
A. Capital Structure
B. Taxable Year
C. Methods of Accounting
D. Costs of Formation
PART 2 DETERMINING A CORPORATION’S TAX LIABILITY
Chapter 4 Determining a Corporation’s Tax Liability
A. Corporate Income Tax Formula
B. Character of Income to Shareholders
C. Special Rules for Certain Deductions
D. Affiliated Groups
E. Accumulated Earnings Tax
F. Personal Holding Company Tax
PART 3 CORPORATE DISTRIBUTIONS
Chapter 5 Nonliquidating Distributions
A. Dividends and the Role of Earnings and Profits
B. Calculating Current Earnings and Profits
C. Impact of a Nonliquidating Distribution on the Shareholders
D. Impact of a Nonliquidating Distribution on the Corporation
E. Constructive Dividend Distributions
Chapter 6 Stock Dividends and Stock Redemptions
A. Stock Dividends
B. Stock Redemptions
Chapter 7 Liquidating Distributions
A. Gain or Loss Recognition to the Corporation
B. Gain or Loss Recognition to the Shareholders
C. Tax Basis of Property Received by Shareholders
D. Impact on Tax Attributes of the Corporation
E. Parent-Subsidiary Exceptions
PART 4 S CORPORATIONS
Chapter 8 S Corporation Eligibility and Operations
A. S Corporations and Coordination with Subchapter C
B. Qualifying for S Corporation Status
C. Making the S Election
D. Qualified Subchapter S Subsidiaries (QSubs)
E. Termination of S Status
F. S Corporations are Generally not Subject to Income Tax
G. Separately Stated Items
H. S Corporation Ordinary Business Income/Loss
I. Mechanism for Reporting Income to Shareholders—Form 1120S
J. Adjustments to Shareholder’s Stock Basis
K. Treatment of Losses
L. Fringe Benefits to Shareholders
M. Entity-Level Taxes
N. Qualified Business Income Deduction
Chapter 9 Distributions from S Corporations to Shareholders
A. Nonliquidating Distributions
B. Liquidating Distributions
PART 5 CORPORATE MERGERS AND ACQUISITIONS
Chapter 10 Taxable Acquisitions
A. Taxable Asset Acquisitions in General
B. Taxable Asset Acquisitions: Special Considerations
C. Taxable Stock Acquisitions
Chapter 11 Tax-Free Reorganizations in General
A. Nonrecognition to Shareholder
B. Nonrecognition to Target Corporation
C. Types of Reorganizations
D. Continuity of Shareholder Interest
E. Continuity of Business Enterprise
F. Business Purpose
G. Step-Transaction Doctrine
Chapter 12 Type A, B, and C Reorganizations
A. Type A Reorganizations: Two-Party Merger or Consolidation
B. Type A Reorganizations: Forward Triangular Merger
C. Type A Reorganizations: Reverse Triangular Merger
D. Type B Reorganizations: Stock for Stock
E. Type C Reorganizations: Stock for Assets
Chapter 13 Type D, E, F, and G Reorganizations
A. Type D Reorganizations: Assets for Stock
B. Type E Reorganizations: Recapitalizations
C. Type F Reorganizations: Changes in Identity
D. Type G Reorganizations: Bankruptcy Reorganizations
Chapter 14 Corporate Divisions
A. Statutory Authorization
B. Tax Consequences to Distributing Corporation
C. Spin-Offs, Split-Offs, and Split-Ups
Chapter 15 Carryovers of Corporate Tax Attributes in Acquisitions
A. Carryovers in Certain Corporate Acquisitions
B. Limitation on Use of Net Operating Losses upon Ownership Change
PART 6 AFFILIATED CORPORATIONS
Chapter 16 Affiliated Corporations
A. Statutory Authorization for Consolidated Returns
B. Definition of “Affiliated Group”
C. Intercompany Transactions
D. Calculating Consolidated Taxable Income
E. Consolidated Net Operating Losses
F. Stock Basis Adjustments
G. Miscellaneous Consolidated Return Issues
PART 7 REPORTABLE TRANSACTIONS AND MATERIAL ADVISORS
Chapter 17 Reportable Transactions and Material Advisors
A. Reportable Transactions and Related Penalties
B. Disclosure by Material Advisors
Index
Ryan H. Pace, M.Tax, J.D., LL.M., is currently a professor of taxation at Weber State University. He
teaches graduate and undergraduate courses in taxation and business law, including:
- Advanced Corporate Taxation
- Advanced Partnership Taxation
- Mergers, Acquisitions & Consolidations
- Advanced Individual Taxation
- International Taxation
- Tax Research & Communication
- Business Entity Taxation
- Legal Environment of Business
Mr. Pace also serves as the Director of both the Master of Accounting program and the Master of
Taxation program at Weber State. Prior to his teaching career, Mr. Pace was a full-time tax attorney
at large law firms in Arizona and Utah. Mr. Pace graduated from New York University with a Master
of Laws degree in taxation after receiving his Juris Doctor with honors from Washburn University
School of Law. He also received a Master of Taxation degree from Arizona State University and his
Bachelor of Science degree from the University of Utah. He is admitted to practice law before the
United States Supreme Court, The United States Tax Court, and is a member of the Utah State Bar
and State Bar of Arizona (inactive).
Mr. Pace has written several articles in the area of taxation including in the following journals:
- Journal of Legal Tax Research
- Tax Notes
- The Tax Adviser
- Business Entities
- The CPA Journal
In addition to this textbook, Mr. Pace has authored two other textbooks—Business Entity Taxation
and Legal Environment of Business, both published by Kendall Hunt Publishing. Mr. Pace
has also participated in many continuing education programs and academic conferences. He currently
lives in Morgan, Utah, with his wife and three children and enjoys reading and playing
basketball.
Corporate Taxation addresses important issues regarding the formation, operation, and liquidation of C corporations and S corporations.
In particular, this text covers topics such as:
- contributing property and services to a corporation
- determining a shareholder’s tax basis in the corporation
- selecting a corporation’s taxable year
- computing a corporation’s taxable income
- structuring taxable and tax-free corporate acquisitions and divisions
- understanding affiliated groups and the consolidated return regulations
- handling nonliquidating and liquidating distributions
- the impact of flow-through treatment on the corporation and shareholders
This text includes review problems at the end of each chapter to strengthen the reader’s understanding of important concepts and the application of the law to particular transactions. Ultimately, after studying this text, the reader should have a valuable understanding of the taxation of both C corporations and S corporations.
About the Author
PART 1 CORPORATE FORMATION
Chapter 1 Selecting a Business Entity
A. Sole Proprietorship
B. General Partnership
C. Limited Partnership
D. Limited Liability Partnership
E. Limited Liability Limited Partnership
F. Limited Liability Company
G. Corporation
H. Tax Treatment of Business Entities under the Check-the-Box Regulations
I. Qualified Joint Ventures between Married Persons
J. Obtaining an Employer Identification Number (EIN)
Chapter 2 Transfer of Property to a Corporation
A. C Corporations in General
B. Review of Terminology Used in Sales or Exchanges
C. Nonrecognition of Gain or Loss by Transferor of Property to a Controlled Corporation
D. Transfers of Property Encumbered by Liabilities
E. Determining a Shareholder’s Initial Tax Basis in the Stock Received
F. Nonrecognition of Gain or Loss by the Corporation
G. Determining the Corporation’s Initial Tax Basis in the Assets Received
H. The Shareholder’s Initial Holding Period in the Stock Received
I. The Corporation’s Initial Holding Period in the Assets Received
J. Transfers to Corporations with Pre-Existing Shareholders
K. The Transfer of Services and the Impact on the “Control” Requirement
L. Contribution of Depreciable Assets
M. Special Rule for “Investment Companies”
N. Transfer of Services to a Corporation in Exchange for Stock
Chapter 3 A Corporation’s Capital Structure and Other Formation Issues
A. Capital Structure
B. Taxable Year
C. Methods of Accounting
D. Costs of Formation
PART 2 DETERMINING A CORPORATION’S TAX LIABILITY
Chapter 4 Determining a Corporation’s Tax Liability
A. Corporate Income Tax Formula
B. Character of Income to Shareholders
C. Special Rules for Certain Deductions
D. Affiliated Groups
E. Accumulated Earnings Tax
F. Personal Holding Company Tax
PART 3 CORPORATE DISTRIBUTIONS
Chapter 5 Nonliquidating Distributions
A. Dividends and the Role of Earnings and Profits
B. Calculating Current Earnings and Profits
C. Impact of a Nonliquidating Distribution on the Shareholders
D. Impact of a Nonliquidating Distribution on the Corporation
E. Constructive Dividend Distributions
Chapter 6 Stock Dividends and Stock Redemptions
A. Stock Dividends
B. Stock Redemptions
Chapter 7 Liquidating Distributions
A. Gain or Loss Recognition to the Corporation
B. Gain or Loss Recognition to the Shareholders
C. Tax Basis of Property Received by Shareholders
D. Impact on Tax Attributes of the Corporation
E. Parent-Subsidiary Exceptions
PART 4 S CORPORATIONS
Chapter 8 S Corporation Eligibility and Operations
A. S Corporations and Coordination with Subchapter C
B. Qualifying for S Corporation Status
C. Making the S Election
D. Qualified Subchapter S Subsidiaries (QSubs)
E. Termination of S Status
F. S Corporations are Generally not Subject to Income Tax
G. Separately Stated Items
H. S Corporation Ordinary Business Income/Loss
I. Mechanism for Reporting Income to Shareholders—Form 1120S
J. Adjustments to Shareholder’s Stock Basis
K. Treatment of Losses
L. Fringe Benefits to Shareholders
M. Entity-Level Taxes
N. Qualified Business Income Deduction
Chapter 9 Distributions from S Corporations to Shareholders
A. Nonliquidating Distributions
B. Liquidating Distributions
PART 5 CORPORATE MERGERS AND ACQUISITIONS
Chapter 10 Taxable Acquisitions
A. Taxable Asset Acquisitions in General
B. Taxable Asset Acquisitions: Special Considerations
C. Taxable Stock Acquisitions
Chapter 11 Tax-Free Reorganizations in General
A. Nonrecognition to Shareholder
B. Nonrecognition to Target Corporation
C. Types of Reorganizations
D. Continuity of Shareholder Interest
E. Continuity of Business Enterprise
F. Business Purpose
G. Step-Transaction Doctrine
Chapter 12 Type A, B, and C Reorganizations
A. Type A Reorganizations: Two-Party Merger or Consolidation
B. Type A Reorganizations: Forward Triangular Merger
C. Type A Reorganizations: Reverse Triangular Merger
D. Type B Reorganizations: Stock for Stock
E. Type C Reorganizations: Stock for Assets
Chapter 13 Type D, E, F, and G Reorganizations
A. Type D Reorganizations: Assets for Stock
B. Type E Reorganizations: Recapitalizations
C. Type F Reorganizations: Changes in Identity
D. Type G Reorganizations: Bankruptcy Reorganizations
Chapter 14 Corporate Divisions
A. Statutory Authorization
B. Tax Consequences to Distributing Corporation
C. Spin-Offs, Split-Offs, and Split-Ups
Chapter 15 Carryovers of Corporate Tax Attributes in Acquisitions
A. Carryovers in Certain Corporate Acquisitions
B. Limitation on Use of Net Operating Losses upon Ownership Change
PART 6 AFFILIATED CORPORATIONS
Chapter 16 Affiliated Corporations
A. Statutory Authorization for Consolidated Returns
B. Definition of “Affiliated Group”
C. Intercompany Transactions
D. Calculating Consolidated Taxable Income
E. Consolidated Net Operating Losses
F. Stock Basis Adjustments
G. Miscellaneous Consolidated Return Issues
PART 7 REPORTABLE TRANSACTIONS AND MATERIAL ADVISORS
Chapter 17 Reportable Transactions and Material Advisors
A. Reportable Transactions and Related Penalties
B. Disclosure by Material Advisors
Index
Ryan H. Pace, M.Tax, J.D., LL.M., is currently a professor of taxation at Weber State University. He
teaches graduate and undergraduate courses in taxation and business law, including:
- Advanced Corporate Taxation
- Advanced Partnership Taxation
- Mergers, Acquisitions & Consolidations
- Advanced Individual Taxation
- International Taxation
- Tax Research & Communication
- Business Entity Taxation
- Legal Environment of Business
Mr. Pace also serves as the Director of both the Master of Accounting program and the Master of
Taxation program at Weber State. Prior to his teaching career, Mr. Pace was a full-time tax attorney
at large law firms in Arizona and Utah. Mr. Pace graduated from New York University with a Master
of Laws degree in taxation after receiving his Juris Doctor with honors from Washburn University
School of Law. He also received a Master of Taxation degree from Arizona State University and his
Bachelor of Science degree from the University of Utah. He is admitted to practice law before the
United States Supreme Court, The United States Tax Court, and is a member of the Utah State Bar
and State Bar of Arizona (inactive).
Mr. Pace has written several articles in the area of taxation including in the following journals:
- Journal of Legal Tax Research
- Tax Notes
- The Tax Adviser
- Business Entities
- The CPA Journal
In addition to this textbook, Mr. Pace has authored two other textbooks—Business Entity Taxation
and Legal Environment of Business, both published by Kendall Hunt Publishing. Mr. Pace
has also participated in many continuing education programs and academic conferences. He currently
lives in Morgan, Utah, with his wife and three children and enjoys reading and playing
basketball.