Considers the sale of both C corps and S corps. Discuss the use of compensation for services, covenants not to compete, personal goodwill and contingent consideration, as well as the use of installment sales. Expertise in the sale of a corporate business by selling corporate stock is a situation where effective tax planning can reduce the tax cost to both the buyer and the seller. Also, consider the possible application of IRC 1202, 1042 and 1045, and the possible value of a Section 338, 338(h)(10) or when 336(e) election is evaluated.
• Determine tax and non-tax differences between a stock sale and an asset sale.
• Identify possible benefits from using compensation arrangements, covenants not to compete, personal goodwill and contingent consideration.
• Recognize differences between selling the stock of a C corp compared to an S corp.
• Identify possible benefits of Section 1042, 1045 and 1202.
• Recall S corp tax planning opportunities related to suspended losses, installment sales and termination of S corp status.
• Recognize when a QSUB election is beneficial.
• Determine how a stock redemption could be used related to a stock sale.
• Stock sale vs asset sale
• S corp versus C corp
• Sale of Qualified Small Business Stock (IRC 1202 and 1045)
• “Survival” of net operating losses and tax credit carryforwards
• Planning regarding S corp suspended losses
• Section 338, 338(h)(10) or 336(e) elections
• QSUB election
• S corp election termination planning
• Stock redemptions related to a stock sale
CPAs and attorneys.
An understanding of the taxation of individuals, corporations, S corps and partnerships.
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