Event Description

When a new business is formed, there are a lot of questions. What is the most tax-advantageous way to structure the entity? What issues do we need to be aware of? How should owners pay themselves? For corporations, these questions are even tougher since they are regulated so heavily. In this course, we will discuss how new shareholders can form a corporation tax-free. We will also discuss how basis is calculated for the shareholders, including what to do when debt is involved. Finally, we will discuss different ways that shareholders may be compensated and the pros and cons of each. If you want to confidently guide your corporate clients through entity formation, basis calculations, and compensation planning, our Understanding Corporate Taxation series is designed for you!

Objectives

• Identify the necessary elements for a tax-free corporate formation under Sec 351.
• State when property encumbered by debt may create a gain for a contributing shareholder.
• Recognize the elements of reasonable compensation.
• Identify the tax implications of Incentive Stock Options (ISOs).