S Corporations: Formation FLEXCAST

Overview

Forming an S corporation is often treated as a quick compliance step; until a client brings you a balance sheet with liabilities in excess of basis, an LLC statutory conversion already in motion, or a late decision to check the box without understanding the deemed steps. In this course, Robert Jamison walks through the practical ways an entity becomes a corporation and ties each path to the federal tax consequences practitioners have to defend. You’ll sharpen your command of Section 351 control and boot, basis effects and liability assumptions, and the often-overlooked continuity and eligibility issues that show up when entities change form without changing operations. The course also frames why S status can be advantageous and why getting out can be expensive.

Highlights

Formation of an S Corporation. Tax rules concerning incorporation. Formless conversions and cross-entity mergers. Conversion of limited liability company to corporation or vice versa via state law. Tax treatment of formless conversion of a partnership. Changing tax status without changing nontax status. Options within elective status.

Prerequisites

None.

Designed For

CPAs and tax professionals.

Objectives

Identify the primary legal/tax pathways to corporate (and S corporation) formation, including new corporation formations, statutory conversions, mergers, and entity classification elections. Apply the general nonrecognition framework of IRC Section 351, including the 80% control requirement and the corporation’s nonrecognition on issuance of stock. Distinguish between boot and liability assumption rules in incorporations, including circumstances where liabilities may be treated as boot and when liabilities can trigger gain due to liabilities in excess of basis. Compute shareholder stock basis and corporate asset basis outcomes in common formation scenarios, including adjustments for debt relief, recognized gain, and boot received. Evaluate how formation method choices can affect ongoing planning considerations, including employment tax characterization for shareholder-employees, QBI wage interactions, and potential applicability of state PTE tax regimes.

Preparation

None.

Notice

This is a FlexCast (no exam required) and may be viewed only Monday - Saturday, 5am - 5pm PT. You may take up to one year from the date of purchase to complete the course. Pause your FlexCast and resume at a convenient day during the hours above. Partial credit for 2+ credit courses: If you are unable to complete the course in one sitting, partial credit can be awarded (minimum of one credit). To earn the remaining credits, you must return later and start the course from the beginning. Use chat to ask questions of a subject matter expert during the program.