The technical rules that catch closely held companies: accumulated earnings, built-in gains, related-party transactions, the economic substance doctrine, deferred compensation, and equity awards.
33 guides, each reviewed by a CPA licensed in the US and Canada.
The accumulated earnings tax under IRC 531 imposes a 20% penalty tax on C-Corporations that retain earnings beyond the reasonable needs of the business.
Small Business & BookkeepingC-Corporations that retain earnings beyond reasonable business needs face a 20% accumulated earnings tax on top of regular corporate tax.
Small Business & BookkeepingThe accumulated earnings tax under IRC 531 is a 20% penalty tax imposed on C-Corporations that accumulate earnings beyond the reasonable needs.
Small Business & BookkeepingThe accumulated earnings tax (AET) under IRC 531-537 is a 20% penalty tax on C-Corporations that accumulate earnings beyond the reasonable needs.
Small Business & BookkeepingThe assignment of income doctrine prevents a taxpayer from avoiding taxes by directing income they have earned to another person or entity.
Small Business & BookkeepingWhen a C-Corp converts to S-Corp status, any unrealized appreciation in the corporation's assets at the time of conversion is subject to the built-in.
Small Business & BookkeepingWhen a C-Corporation elects S-Corporation status, the Built-In Gains (BIG) tax under IRC 1374 imposes a corporate-level tax on any appreciation.
Small Business & BookkeepingThe economic substance doctrine, codified under IRC 7701(o), allows the IRS to disallow tax benefits from a transaction that lacks economic substance.
Small Business & BookkeepingThe economic substance doctrine, codified in IRC 7701(o) by the Health Care and Education Reconciliation Act of 2010. The two-prong test (IRC 7701(o)): |.
Small Business & BookkeepingThe economic substance doctrine (codified in IRC 7701(o)) requires that a transaction have meaningful economic effects apart from tax benefits.
Small Business & BookkeepingISOs and NSOs have different tax timing and rates. NSOs are taxed as ordinary income at exercise; ISOs get capital gains treatment if holding periods.
Small Business & BookkeepingWhen a foreign person or entity owns a US business or invests in US real property, the US tax rules are significantly more complex than domestic taxation.
Small Business & BookkeepingUnder IRC 280G, when a corporation undergoes a change in ownership or control and makes 'excess parachute payments' to certain officers, shareholders.
Small Business & BookkeepingUS citizens and residents are taxed on worldwide income, and US business owners with foreign operations face additional layers of complexity.
Small Business & BookkeepingUS persons who own or control foreign corporations face a complex set of anti-deferral rules designed to prevent the indefinite sheltering of income.
Small Business & BookkeepingIRC 1244 lets founders deduct losses on qualifying small business stock as ordinary losses, not capital losses. The annual limit is $50,000 ($100.
Small Business & BookkeepingIRC 409A governs nonqualified deferred compensation (NQDC) plans, imposing strict rules on when compensation can be deferred, when it must be paid.
Small Business & BookkeepingIRC 409A governs all nonqualified deferred compensation arrangements and imposes severe penalties for noncompliance. Covers key rules, filing.
Small Business & BookkeepingThe IRC 83(b) election is one of the most valuable and most frequently missed tax elections available to startup founders, early employees.
Small Business & BookkeepingAn IRC 83(b) election allows a service provider who receives restricted stock or LLC/partnership interests subject to vesting to pay income tax.
Small Business & BookkeepingTransactions between related parties receive special scrutiny under the tax code because the parties can manipulate prices, timing.
Small Business & BookkeepingIRC 267 applies heightened scrutiny to transactions between related parties. Family members, controlled entities, and trusts face loss disallowance rules.
Small Business & BookkeepingThe AAA tracks the S-Corp's cumulative net income minus distributions since the S election. Distributions are tax-free to the extent of AAA.
Small Business & BookkeepingIRC Section 1244 allows founders to deduct up to $50,000 ($100,000 MFJ) of losses on qualifying small business stock as ordinary losses instead of capital.
Small Business & BookkeepingSection 1244 of the IRC allows individual shareholders of qualifying small business corporations to treat losses on the sale or worthlessness.
Small Business & BookkeepingSection 1244 of the Internal Revenue Code allows founders and original investors in small businesses to deduct stock losses as ordinary losses (up.
Small Business & BookkeepingUnder IRC 1244, losses on the sale or worthlessness of qualifying small business stock receive ordinary loss treatment (up to $50,000 single.
Small Business & BookkeepingIRC 409A governs nonqualified deferred compensation arrangements. Violations trigger a 20% penalty tax plus interest on the deferred amount.
Small Business & BookkeepingEquity compensation is one of the most complex areas of individual and business taxation because the tax consequences depend on the type of award.
Small Business & BookkeepingWhen a US business hires workers outside the United States, the tax and compliance obligations depend on the worker's classification (employee vs.
Small Business & BookkeepingJoint ventures between two or more businesses create different tax consequences depending on whether the arrangement is structured as a partnership.
Small Business & BookkeepingIRC 368 defines seven types of tax-free corporate reorganizations (A through G) that allow businesses to merge, consolidate, acquire.
Small Business & BookkeepingIRC 368 provides seven types of tax-free corporate reorganizations (Types A through G) that allow businesses to merge, consolidate, acquire.