Consent extends period for S corp. items

Article Abstract:

The Tax Court has ruled in favor of a taxpayer who claimed that the IRS could not impose adjustments in his return with regards to his income as an S corporation shareholder even though he had signed Form 872-A. The Tax Court accepted the taxpayer's argument that even though he had consented to extend his limitations period by executing Form 872-A, the adjustments imposed by the IRS could not be made as the limitations period of the S corporation he held shares in had already expired. This Tax Court ruling established in 'Bufferd' has been upheld by the Second Circuit.

Finance, taxation, & monetary policy, United States. Tax Court

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Tier system for S corporation distributions can be used to reduce tax to shareholders

Article Abstract:

A complex set of provisions dictate the interaction of stock and debt basis adjustments for shareholders of S corporations. Guidelines for planning transactions for the maximum benefit of shareholders are discussed. The relevant provisions governing increases and decreases in the stock basis of an S corporation shareholder are discussed. Examples of how the rules regarding the accumulated adjusted account operate are provided.

Tax accounting, Corporate distributions

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