Assume that A sells his S corporation stock in December 2009.
To prevent double taxation, shareholders are required to increase their basis in the S corporation stock by income and decrease it by losses, distributions, and nondeductible expenses.
FORBES: Tax Court Holds S Corporation Shareholders Liable for $30 Million Tax Deficiency
Third, a policy aimed at facilitating employee ownership: S corporation employee stock ownership plans (S ESOPs) are also a deviation from a pure income tax system, but the benefits of promoting employee ownership are broad based and well established.
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Using debt to buy another corporation's stock or merely changing equity to debt wouldn't qualify.
The S corporation, in turn, owned stock in a C corporation.
FORBES: Tax Court Holds S Corporation Shareholders Liable for $30 Million Tax Deficiency
His biggest personal lender also got a sweetheart deal in joint ventures with Chesapeake the corporation via a preferred stock transaction.
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Silicon Valley periodically rediscovers the SPAC, or Special Purpose Acquisition Corporation, when the overall stock market is healthy but startups are having trouble going public.
Instead of finding a lender of shares, they have their broker just run up an electronic tab, so to speak, on the books of a stock-clearing corporation.
This ruling has important planning implications as well, as it confirms that S corporations may want to think twice before buying the stock of a corporation and then making a QSub election.
FORBES: Tax Court Holds S Corporation Shareholders Liable for $30 Million Tax Deficiency
If you own stock in an S corporation, this poses a unique planning opportunity.
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Example: A owns 50 percent of the stock of an S corporation (S).
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Memo 2013-39, a Pennsylvania family formed a number of trusts who in turn owned stock in an S corporation.
FORBES: Tax Court Holds S Corporation Shareholders Liable for $30 Million Tax Deficiency
To qualify for the rollover, you must buy or receive your stock directly from the corporation, not from another investor.
So, if you are looking for the sort of "ugly" that most traders are looking for, consider a stock like CHC Helicopter Corporation.
That included Apple, the largest corporation in the world, whose own stock fell 9.4% that same morning.
Last evening, after the close of another Greek debt crisis related stock market drubbing, Atmel Corporation ( ATML) reported quarterly results.
Ms. Cabot, who launched Dansko in 1990 by selling shoes from the back of a Volvo station wagon, says the tax benefits associated with employee stock ownership enabled the S corporation to manage the long-term debt of buying out the couple's ownership stake.
Activist investor Carl Icahn is at it again, this time announcing a 9.5% stake in Oshkosh Corporation after the bell on Thursday, sending the stock through the roof in the afterhours session.
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It is based on 150, 000 corporation-years of default data from publicly available financials and stock prices.
American Express was founded in 1850 as a joint stock association and was incorporated in 1965 as a New York corporation.
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American Express Co. was founded in 1850 as a joint stock association and was incorporated in 1965 as a New York corporation.
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Back in the 1980s, Data Broadcasting Corporation (DBC) developed a product called MarketWatch to deliver real time stock quotes to a PC via cable television.
Even if you have big dreams for your clothing shop, it's much simpler to set it up as an LLC and switch to a C corporation when you get closer to ringing the bell on the New York Stock Exchange.
There was just one problem: the appraisal was not for the corporate stock, but rather the two underlying apartment buildings owned by the corporation.
Last but certainly not least, shares of Cintas Corporation (NASDAQ: CTAS) provided some of the biggest gains from The Stock List so far this week.
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In this case, the parent S corporation continued its investment in the subsidiary corporation, but in a different form by holding the assets directly rather than through stock ownership.
FORBES: Tax Court Holds S Corporation Shareholders Liable for $30 Million Tax Deficiency
Included in the positive adjustment to stock basis is an increase for tax-exempt income realized by the S corporation.
FORBES: Tax Court Holds S Corporation Shareholders Liable for $30 Million Tax Deficiency
But is stock price the only, and the ultimate, arbiter of the responsiblities and obligations of a corporation?
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This gives shareholders the added benefit of an increased stock basis, which may allow the shareholder to utilize flow-through losses allocated from the corporation.
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Shareholders of common stock would flex their right to inspect the books, and even bring suit on behalf of the corporation if such McCourt transactions were consummated.
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