Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 3 of 3
Full-Text Articles in Law
Never-Ending Limitations On S Corporation Losses: The Slippery Slope Of S Corporation Debt Guarantees, Francine J. Lipman
Never-Ending Limitations On S Corporation Losses: The Slippery Slope Of S Corporation Debt Guarantees, Francine J. Lipman
Francine J. Lipman
The amount of S corporation entity level net operating losses that are allowed to pass through to S corporation shareholders is limited. Shareholders may increase these limits by properly structuring their debt especially shareholder guarantees of S corporation debt. This article focuses on critical shareholder missteps in the recent Tax Court and Seventh Circuit Court of Appeals cases of T.F. Grojean. Because of inadequate tax planning the Grojeans' S corporation pass-through losses were not allowed. The article concludes with a summary of lessons S corporation shareholders can learn from the Grojeans' missteps.
S Corporation Loss Limitations: The Tax Court Provides Potential Hope For Related Party Debt Restructurings, Francine J. Lipman
S Corporation Loss Limitations: The Tax Court Provides Potential Hope For Related Party Debt Restructurings, Francine J. Lipman
Francine J. Lipman
This article describes the significant S corporation shareholder basis limitations on pass-through losses. The article focuses on the Internal Revenue Service's (Service) and the courts' strict scrutiny and denial of S corporation shareholder basis when related party debt has been restructured to increase the amount of allowable pass-through losses. The Tax Court, in its recent decision in Culnen v. Commissioner, 79 T.C.M. (CCH) 1933 (2000), rev'd on other grounds, 89 A.F.T.R.2D (RIA) 383 (3d Cir. 2002), has made an affirmative statement that it will not automatically disallow an S corporation shareholder's basis when borrowed funds originate with a related entity. …
Incentive Stock Options And The Alternative Minimum Tax: The Worst Of Times, Francine J. Lipman
Incentive Stock Options And The Alternative Minimum Tax: The Worst Of Times, Francine J. Lipman
Francine J. Lipman
Congress enacted the Alternative Minimum Tax (AMT) to preclude high income individuals from escaping their federal income tax liabilities by artful manipulation of certain tax provisions. In recent years, increasing numbers of moderate-income taxpayers have been subject to AMT. The problem has been especially acute for technology sector employees who exercised incentive stock options (ISOs) while the market was high, sold their stock after its value fell, and found themselves owing AMT they could not afford to pay. This Essay explains the complexity of ISOs and the AMT and argues that the AMT adjustment for ISOs should not be eliminated, …