This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction. 18See Scott, "PPP Expense Deductibility and Forgiveness Raises Basis, Other Issues,"The Tax Adviser(Dec. 27, 2020 ). Two recent cases addressed whether an S corporation violated the rule against having more than one class of stock. have a decreased tax liability. 116-136. No economic substance to business partners' transactions: In Kechijian,21 two business partners engaged in a series of complex structuring and restructuring transactions to ultimately decrease the tax liability on shares of stock once it became substantially vested. In general, an ETSC is any C corporation (1) that was an S corporation on the day before the date of enactment of the TCJA and revoked its S corporation election in the two-year period beginning on the date of enactment; and (2) the owners of the stock of which (determined on the date on which such revocation is made) were the same as, and those owners held the stock in the same proportions as, on the date of enactment. Have Your LLC Taxed as an S Corp - S Corp Election Form 2553 - Incfile still terminating his interest on March 31, 2010, and is made. PDF Tax Considerations of Transfers to And Distributions From the C or S Entering change of ownership for an S corporation (1120S) in Lacerte The stock of Y was transferred to eligible S shareholders. 13Consolidated Appropriations Act, 2021, P.L. Sec. This provision is intended to address concerns that when S corporations with AE&P make distributions to cover shareholders' tax liabilities, including GILTI, they may not have enough AAA to make pro rata distributions without dipping into AE&P. election assures the buyer that losses incurred after the As to the question of whether a S-Corporation can make distributions to select shareholders that are disproportionate to the shareholders ownership interest, the simple answer is that it is not allowed.
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