Uncategorized - The S Corporation Association

Should Main Street Businesses Elect C Corp Status? No!

The idea that corporate-only tax reform isn’t so bad because Main Street businesses can elect C corporation status has been argued for years. But should Congress reduce the corporate tax rate with the expectation that pass-through businesses will just switch to C status to access the lower rates? The answer is no. Here are the main points:

It’s the opposite of tax reform. The corporate-only approach to tax reform is effectively “anti-tax reform.” It will return us to the pre-1986 era, when corporate tax rates were significantly lower than individual rates and tax gaming and income sheltering were rampant.
It increases the …

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admin2019-02-01T20:00:10+00:00February 4, 2015|

S Corp Provisions on House Floor

Last Friday, longtime S-CORP allies Rep. Dave Reichert (R-WA) and Rep. Ron Kind (D-WI) introduced two pieces of legislation – H.R. 629 and H.R. 630 – to extend tax provisions critical to America’s 4.6 million S corporations.

The bills would make permanent the five-year built-in gains holding period as well as a basis adjustment fix for S corporations making charitable contributions. They build off the momentum from last Congress when identical bills successfully passed the House with broad bipartisan support. These provisions are ones that we’ve championed for years, and go a long way towards making the tax …

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admin2019-02-01T20:00:11+00:00February 3, 2015|

Mark to Market for Dead People

The President’s budget is out and, as we have in the past, we will start with a disclaimer. Congress requires the President to issue a budget every year, and every year the President (regardless of party) complies with a ridiculously long and labored set of phone book-like documents outlining the budget. And every year Congress yawns and says it’s dead on arrival. So take our commentary below with a grain of salt, as most of the provisions in this budget are going nowhere, fast.

That said, the budget includes a couple tax proposals that caught the attention of our members, …

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admin2019-02-01T20:00:11+00:00February 2, 2015|

A Tale of Two Speeches

The president gave his State of the Union speech last Tuesday, while his Secretary of Treasury spoke to the Brookings Institution the following morning. The president didn’t mention tax reform, whereas Lew devoted nearly his entire speech to building the case for action this year. It was a head-scratching juxtaposition that still has us wondering if Treasury and the White House are on speaking terms these days.

You can read the president’s speech here
You can watch the Lew speech here

Lew’s speech in particular is worth watching. His focus was on the tax reform “framework” Treasury put forward three …

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admin2019-02-01T20:00:11+00:00January 26, 2015|

Tax Foundation on Pass-Through Businesses

The Tax Foundation today released a great paper outlining the state of American pass-through businesses – S corps, partnerships, and sole props – and how the tax code currently treats those companies. According to the Foundation, those businesses account for more jobs and more business income than traditional C corps, making them the major player in the American economy. As the paper concludes:

One of the main goals of fundamental tax reform is to make U.S. businesses more competitive and to increase economic growth. This requires a reduction in taxes on businesses and investment. Most attention is given to traditional …

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admin2019-02-01T20:00:11+00:00January 21, 2015|