Stock acquisitions and liquidations by S corporations: availability of benefits afforded by sections 332 and 338

Article Abstract:

Technical Advice Memorandum 9245004 makes the benefits of section 332 and 338 available to S corporations, which allows the purchaser's acquisition of target stock to treated as qualified stock purchases. S corporations can elect to treat the stock purchase as a purchase of the target's assets, or as a sale of stock consistent with the form of the transaction, therefore leaving the target's basis in its assets unchanged. This should result in less circuitous financial planning and allow S corporations more flexibility in tax affairs.

Corporate reorganizations, Buy-sell agreements

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Incentive stock options in the S corporation context

Article Abstract:

S corporations contemplating offering incentive stock options (ISOs) must be careful to avoid additional tax liability or unintentional termination of S status. Both ISO and S corporation laws must be followed. S corporations can protect their status by using buy-sell agreements to prevent inappropriate stock transfers, placing restrictions on shares involved, and establishing appropriate distribution and liquidation rights for proceeds.

Incentive stock options

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The choice of disregarded entities for S corporations

Article Abstract:

The two classes of domestic disregarded entities for federal tax purposes available to an S corporation are discussed. The author defines Subchapter S subsidiary and single member limited liability company, and compares QSubs with single member LLCs in terms of their tax treatment. Acquisitions and mergers involving disregarded entities are also discussed.

United States, Acquisitions and mergers, Limited liability companies, Disregard of corporate entity, Disregarding corporate entity

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