S corporation tax

1. Nature of S corporation
2. Eligibility requirements
3. Election of S corporation
4. Effect of S corporation   election on corporation
5. Effect of S corporation   election on shareholders
6. Termination of S corporation election

Nature of S corporation

l  Entity characteristics

l  Tax characteristic

     Entity characteristics

     Tax characteristics

l   股東對公司負債不承擔責任

l   股份可以自由轉讓

l   股東本人也可以是企業員工

l   依比例承擔損益，而非分配

l   沒有AMT PHC AET

l   Individual tax preferences are allocated   to shareholder

l   The adjusted basis of shareholder’s is generally   adjusted at year end

l   C型公司股東初始投資金額即為basis; S型公司之basis卻需每年調整

Eligibility requirements

l   Eligibility entity

l   Shareholder requirements

l   Shareholder limit

l   Stock requirements

Eligibility entity

l   外國公司不符合資格

l   聯屬公司成員,母公司,財務金融公司不符合資格

l   S公司可以100%持有C公司

l   S公司可以100%持有S公司

Shareholder requirements

l   不可為股東:非居住者,C公司,合夥組織

l   可以為股東:不動產(破產或遺囑),信託基金,免稅機構

Shareholder limit

l   數量:小於等於100個股東

l   一個家庭內的所有成員視為一個股東

l   一個信託內的每一個受益人視為個別的股東

l   股票的共同擁有者視為一個股東

Stock requirements

l   只能一種股票流通在外(若發行了普通股及不能再發特別股)

l   以下是可以的:

1. shares that vary solely in voting right
2. 可轉換債
3. 庫藏股

Election of S corporation

l   何時轉換

l   需要誰同意

  何時轉換(3/15之前)

  需要誰同意

l   Elect 2/15,當年生效

l   Elect 4/15,次年生效

l   Existing(所有具投票權及不具投票權股東同意)

l   Prior shareholders(once held shares in the current year)

Effect of S corporation election on   corporation

l   Tax year

l   Pass- through entities

l   Corporate- level taxes

Tax year

l   GR-calendar year

l   Exception-“nature” business year (3 months at most)(不能導致3個月的報稅延期)

“nature” business year-大於等於25%的年度總收入集中在年度結束之前的兩個月

Pass- through entities

l   Corporate – not to pay, but need to file

1. Form 1120S;(包含一般營業收入non-separately stated (net business) items及separately stated)
2. 3/15;
3. 6-month extension by filling   Form 7004
4. estimated tax payments must   be made if estimated tax liability is expected to be $500 or more

l   Shareholder- taxed when allocate, not when distribute

(雖然是股東繳稅,但是抵稅權係由公司選擇)

l   若公司非避稅機構,可以選擇現金基礎

1. 每個股東人手一份schedule K-1(列示其所受分攤的金額)
2. 公司只有課稅所得沒有本期損益

Corporate- level taxes

(此種情形發生於此S公司的前身是C公司之前提)

LIFO recapture tax

l   LIFO is not allowed for S corp.

l   在C型公司使用LIFO與FIFO之差額於下列四年間平均攤銷:

1. C型公司的最後一年
2. S型公司的前三年

Built-in gains tax

l   Recognized   built-in gain if the gain:

l   Tax   rate: 35%

Passive investment income tax

l   Previously a C corp

l   Has E & P (有C型公司未發放完的E   & P)

l   Excessive net passive income(ENPI)

定義: (   A – 25%GR) / A *NA

(投資毛額 – 25%總收入)/投資毛額

* 被動收入淨額

l   計算稅額: 稅率 35% 乘 下列數取小者

1. ENPI
2. TI( taxable income)

Effect of S corporation election on   shareholders

l   Pass- through of income / losses to shareholders

l   Shareholder basis

l   Distributions from S corp

Pass- through of income / losses to shareholders

Items:

l   Separately stated items

l   non Separately stated items

-長期資產資本利得淨額

-短期資產資本利得淨額

-慈善捐款

- netted together into “ordinary income (loss)   from trade or business activity”

攤銷方法:每股每天制

Per day income * number of days *   ownership percentage

Ex:01/12/31買下某S公司一半股份,認列的損失為:

Loss * 1/ 365 * 0.5

Limitation of loss:損失限制於股東

l   於S公司內的調整後稅基 加計

l   股東直接貸與公司的貸款  

(以股東名義所擔保之S公司貸款及其擔保皆非股東股權之稅基,但屬合夥組織之股權稅基)l 先前的分配 減計

• 先前的分配

• Ex:

stock basis + shareholder loan(但不可加計nonrecourse basis) – undistributed of income

Passive activity loss limitation

l   Materially participate

l   Actively participate

   -  owns (together with spouse) at 10% of the value of an S corp's stock, up to $2.5萬 of rental losses may be deductible

l   Not materially or actively participateèbe treated as   passive activity

Fringe benefits(非股東員工津貼)

可抵扣:

給非股東員工者

給小於等於2%股東員工者

不可抵扣:

給大於2%員工股東者

Shareholder basis

Shareholder basis

Partnership(比較)

Initial basis

Add: share of income (gains)

Add: additional contributions

Less: share of expense (losses)

Less: distributions to shareholders

Adjusted basis, ending

Distributions from S corp

AAA

(Accumulated adjustments account)

免稅,因為產生課稅所得之年度都征過稅了,分配年度不用再課一次稅

AEP

(Accumulated earnings & profits )

應稅,視為ordinary dividends,因為屬C型公司之未分配盈餘

Stock basis

免稅,屬資本退回

excess

應稅,屬資本利得

Termination of S corporation election

l   Revocation by shareholders

l   Violation of an eligibility requirement

l   Violation of the limit on passive investment income

l   Re-election

Revocation by hareholders

l   股份數超過50%同意撤銷

l   3/15之前撤銷，否則視為次一年度撤銷

Violation of an eligibility requirement

例如:6/15 當天股東人數為101人,則6/15當天企業不再是S型公司

Violation of the limit on passive   investment income

l   連續3年S型公司之總收入之25%來自副業投資收入，且是使用公司轉型前的C型公司盈餘

l   前述公司於第4年度初結束

Re-election

若S公司終止(不論是否出於自願,還是IRS因為有什麼壞事發生而駁回),出非經IRS同意,否則須於5年以後才能重新申請轉型