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S-Corp Mod Introduced in Senate!

Senators John Thune (R-SD) and Ben Cardin (D-MD) today introduced S. 2156, the 2019 version of the S Corporation Modernization Act.  The new Modernization Act focuses on leveling the rules between S corporations and other business forms while increasing the opportunity for S corporations to raise capital.  Among other items, the bill would: Provide meaningful relief from the so-called “Sting Tax” passive income rules; Expand the ability of IRAs to invest in S corporation banks; and Level the tax-treatment of asset sales with sales of S corporation stock. As the Senators noted at the introduction: “While I believe we’ve made ...

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S-Corp Mod Introduced in Senate!2019-07-18T19:11:57+00:00

Joe Biden’s S-Corp

What is it about Presidential candidates and S corporations?  First John Edwards made the practice of abusing the S corporation structure infamous back in 2004.  Then we learned Newt Gingrich did the same thing when he ran in 2012.  And now Joe Biden.  At some point, these candidates are going to realize that saving 3.8 percent on your taxes isn’t worth the political pain it will cost you.  (Hat tip to Bernie Sanders and former President Obama.) For those not up to speed, the former Vice President and his wife released their tax returns this week.  Focusing on his 2017 ...

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Joe Biden’s S-Corp2019-07-11T18:27:43+00:00

Progress on S-Corp SALT Parity Efforts

The House Select Revenue Subcommittee held a hearing today entitled “How Recent Limitations to the SALT Deduction Harm Communities, Schools, First Responders, and Housing Values.” Missing from the list are Main Street Employers, many of whom lost the ability to deduct the State and local taxes they pay on their business income. That’s because tax reform subjected deductions on state and local taxes (SALT) paid by pass-through business owners to the same $10,000 cap as taxes paid on wages and property.  Taxes paid by the business entities themselves, like C corporations, remain fully deductible. Since most states tax pass-through businesses ...

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Progress on S-Corp SALT Parity Efforts2019-06-25T21:54:41+00:00

S-Corp Comments on Section 4960 Excise Tax

The S Corporation Association sent comments to the Department of Treasury today raising concerns that recent guidance it published has the potential to impose the new, Section 4960 excise tax onto private operating companies. The tax is supposed to be targeted at big non-profits and universities that pay their executives and coaches salaries in excess of $1 million per year, but due to expansive definitions of “employee” and “related organization” included in the department’s guidance (Notice 2019-09), the tax could be paid by many family businesses with related foundations and other charities instead. Worse, the new law is written in ...

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S-Corp Comments on Section 4960 Excise Tax2019-05-29T14:58:59+00:00

Tax Foundation Needs to Fix Their Map

The Tax Foundation has updated some of their data on pass-through businesses last week, including this nice map with state-by-state data on the percentage of jobs from pass-throughs, which is helpful.  As before, it shows that pass-through businesses employ the majority of private sector workers in every state of the country, including seven out of ten workers in Montana! On the other hand, this map purporting to show the marginal rates paid by pass-through businesses by state appears to illustrate only a small subset of pass-through businesses, and those towards the bottom end of the possible marginal rate range to ...

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Tax Foundation Needs to Fix Their Map2019-05-22T16:21:50+00:00