Section 1: Business Entities
Business entities
Partnerships
Corporations in general
Forming a corporation
S corporations
- Types of business entities and their filing requirements:
Sole proprietorships
Partnerships
Corporations
S corporations
Farmers
LLCs
Tax-exempt entities and associations - Elections for type of entity
- Employer identification number
- Accounting periods (tax year)
- Accounting methods
Partnerships
- Partnership income, expenses, distributions, and flow-through (e.g. self-employment income)
- Family partnerships
- Partner's dealings with partnership (e.g., exchange of property, guaranteed payments, contribution of property to partnership)
- Basis of partner's interest
- Disposition of partner's interest
- Partnership formation (e.g., partnership agreement, general vs. limited partners, capital contributions)
- Dissolution of partnership (e.g., sale, death of partner)
- Filing requirements and due dates
- Services rendered in return for partnership interest
- Debt discharge
Corporations in general
- Filing requirements and due dates
- Earnings and profits
- Shareholder dividends, distributions, and recognition requirements
- Special deductions and credits (e.g., dividends received deductions, charitable deduction).
- Liquidations and stock
- redemptions
- Accumulated earnings
- Estimated tax payments
Forming a corporation
- Services rendered to a corporation in return for stock
- IRC section 351 exchange
- Transfer and/or receipt of money or property in addition to corporate stock
- Mortgaged property transferred Controlled groups
- Closely held corporations
- Personal service corporations (e.g., 35% rate)
S corporations
- Requirements to qualify
- S corp income, expenses, and separately stated items
- Treatment of distributions (e.g., reasonable compensation)
- Shareholder’s basis (e.g., loan basis, distributions and losses in excess of basis)
- Revocation, termination and reinstatement
- Debt discharge
- Non-cash distributions
- Election procedure
Section 2: Business Financial Information
Business income
Business expenses, deductions and credits
Business assets
Analysis of financial records
Advising the business taxpayer
- Gross business income
- Cost of goods sold (e.g., inventory practices, expenditures included, uniform capitalization rule)
- Net income, net operating losses, and loss limitations including passive activity and at risk limitations
- Gain or loss on disposition of depreciable property
- Cancellation of business debt
Business expenses, deductions and credits
- Employees’ pay (e.g., deductibility of compensation, fringe benefits, rules of family employment, statutory employee, necessary and reasonable)
- Reporting requirements for contractors and employees (e.g., W-2, W-4, Form 1099)
- Business rental deduction
- Depreciation, amortization, IRC section 179, and depletion
- Business bad debts
- Business travel, entertainment, and gift expenses
- Interest expense
- Insurance expense
- Taxes (e.g., deductibility of taxes, assessments, and penalties; proper treatment of sales taxes paid)
- Employment taxes
- Federal excise tax
- Casualties, thefts, and condemnations
- IRC section 199 deduction (domestic production activities)
- Eligibility and deductibility of general business credits (e.g., disabled access credit, investment credit)
- Alternative minimum tax net operating loss deduction
- Home office
Business assets
- Basis of assets
- Disposition of depreciable property
- Like kind exchange
Analysis of financial records
- What type of business (e.g., service, retail, manufacturer, or farm)
- Income statement
- Balance sheet (e.g., proofing beginning and ending balances)
- Method of accounting (e.g., accrual, cash, hybrid)
- Depreciation and amortization
- Depreciation recovery (e.g., recapture, Sec 280F)
- Pass-through activity (e.g., K-1, separately stated items, nondeductible expenses)
- Reconciliation of tax versus books (e.g., M-1, M-2, M-3)
- Related party activity
- Loans to and from owners
Advising the business taxpayer
- Filing obligations (e.g., extended returns)
- Depositing obligations (e.g., employment tax, excise tax)
- Reporting obligations for businesses, (e.g. 1099 series,1031 exchanges, Form 8300)
- Record-keeping requirements (mileage log, accountable plans)
- Related party transactions
- Selection of business entity (e.g., benefits and detriments)
- Comingling (e.g., personal usage of business accounts, separation of business and personal accounts)
- Advice on accounting methods and procedures (e.g., explanation of requirements)
- Transfer elections in or out of the business (e.g., contributed property, distributions)
- Life cycle of the business (e.g., formation, dissolution)
- Type of industry (e.g., personal service corporation)
- Worker classification
- Section 3: Specialized returns and taxpayers
Trust and estate income tax
Exempt organizations
Retirement plans
Farmers
- Trust types (e.g., grantor, irrevocable, tax shelters)
- Distributable net income and accounting income
- Exclusions and deductions
- Fraudulent trusts
- Income in respect of a decedent
- Income (e.g., allocations)
- Separately stated items
- Filing requirements
Exempt organizations
- Qualifying for and maintaining
- tax-exempt status (e.g., 501(c))
- Filing requirements (e.g., 1023, 1024, 990 series)
- Unrelated business taxable income (UBTI)
Retirement plans
- Employer and employee
- contributions
- Reporting requirements
- Plans for self-employed persons (e.g., SEP and SIMPLE)
- Prohibited transactions
- Qualified and non-qualified plans
- Non-discrimination rules
Farmers
- Farm inventory
- Depreciation for farmers
- Various disaster-area provisions
- Disposition of farm assets
- Farm income (e.g., self-raised livestock, crop insurance proceeds)
- Farm tax computation (e.g., Schedule J, Schedule SE, estimated tax)