Federal Income Taxation of Business Organizations 2009

by McDaniel, Paul R.

• ISBN13: 9781599417820
• ISBN10: 1599417820
• Edition: 4th
• Format: Paperback
• Copyright: 2009-08-07
• Publisher: Foundation Pr

Summary

The 2009 Supplement updates the casebook, which provides detailed information on federal income taxation of partnerships and S corporations. The primary casebook's Fourth Edition explores in depth in a single volume both the technical and policy issues associated with taxation of partnerships, C corporations, and S corporations. It is specifically designed for a course focusing on comparison of partnerships, C corporations, and S corporations, while presenting selected in-depth coverage of advanced issues. Adaptable for use in a wide variety of courses or sequence of courses dealing with taxation of business organizations at either the J.D. or LL.M level, it can be used to teach partnership taxation, basic corporate taxation, or corporate reorganizations. Arrangement of both the subdivisions within the chapters and the detailed illustrative material following the principal cases facilitates assignment of selected portions of the material on any particular topic to suit the individual instructor?s choice of method and scope of coverage. Within each section, the book moves from the straight-forward to the more complex rules associated with the topic. Materials on acquisitions and reorganizations are organized to facilitate selective coverage in survey courses.

Table of Contents

Preface	p. iii
Table of Internal Revenue Code Sections	p. ix
Table of Treasury Regulations	p. x
Table of Cases And Rulings	p. xii
Taxation of Partners and Partnerships	p. 1
Introduction to Partnership Taxation	p. 1
Definition of a Partnership	p. 1
Partnership Versus Other Business Arrangement	p. 1
Partnership Versus Corporation	p. 3
Formation of the Partnership	p. 4
Contribution of Money or Property	p. 4
Contribution of Encumbered Property	p. 4
Contribution of Property Versus Contribution of Services	p. 5
Treatment of the Partner Receiving a Partnership Interest in Exchange for Services	p. 5
Treatment of the Partnership Issuing a Partnership Interest in Exchange for Services	p. 5
Taxation of Partnership Taxable Income to the Partners	p. 6
Pass-Thru Of Partnership Income And Loss	p. 6
Determining Partners' Distributive Shares	p. 8
The Section 704(b) Regulations	p. 8
Allocations of Items Unrelated to Nonrecourse Debt	p. 8
Economic effect	p. 8
Substantiality	p. 9
"Business Purpose and "Tax Avoidance" With Respect to Particular Allocations	p. 10
Allocations With Respect to Contributed Property	p. 10
Allocations Where Interests Vary During the Year	p. 12
Allocation of Partnership Liabilities	p. 16
Allocation of recourse Liabilites	p. 16
Transactions Between Partners and the Partnership	p. 17
Transactions Involving Services, Rents and Loans	p. 17
Special Limitations on Loss Deductions at the Partner Level	p. 18
The At Risk Rules of Section 465	p. 18
The Passive Activity Rules of Section 469	p. 18
Sales of Partnership Interests by the Partners	p. 20
The Seller's Side of the Transaction	p. 20
General Principles	p. 20
Capital Gain Versus Ordinary Income: Section 751	p. 20
The Purchaser's Side of the Transaction	p. 21
Partnership Distributions	p. 22
Current Distributions	p. 22
Property Distributions	p. 22
Distributions in Liquidation of a Partnership Interest	p. 22
Section 736(b) Payments: Distributions	p. 22
Basis Adjustments to Remaining Partners	p. 24
Sale of Interest to Other Partners Venus Distribution	p. 24
Partnership Mergers and Divisions	p. 25
Taxation of Corporations and Shareholders	p. 26
Taxation of Corporate Income	p. 26
The Regular Corporate Income Tax	p. 26
Formation of the Corporation	p. 28
Receipt of Stock for Property	p. 28
Basic Principles	p. 28
"Solelyfor Stock" -The Receipt of Other Property	p. 28
"Solely" for Stock Assumption of Liabilities	p. 29
The Control Requirement	p. 30
The Capital Structure of the Corporation	p. 31
Debt Versus Equity	p. 31
Dividend Distributions	p. 33
Dividend Distributions in General	p. 33
Disguised Dividends	p. 33
Intercorporate Dividends	p. 34
Stock Redemptions	p. 35
Introduction	p. 35
Substantially Disproportionate Redemptions	p. 35
Termination of a Shareholder's Interest	p. 37
Distributions Not "Essentially Equivalent to a Dividend"	p. 37
Redemption Through the Use of Related Corporations	p. 38
Elective Passthrough Tax Treatment	p. 39
S Corporations	p. 39
Eligibility, Election and Termination	p. 39
Stockholder Rules	p. 39
Revocation or Termination of S Corporation Status	p. 40
Effect of the Subchapter S Election by a Corporation With No C Corporation History	p. 41
Passthrough of Income and Loss	p. 41
General Principles	p. 41
Effect of Indirect Contributions on Limitation of Loss Deductions to Shareholder Basis	p. 43
Qualified Subchapter S Subsidiaries	p. 44
S Corporations That Have a C Corporation History	p. 44
Distributions From an S Corporation With Earnings and Profits Accumulated From Subchapter C Years	p. 44
Passive Investment Income of an S Corporation With Accumulated Earnings and Profits	p. 45
Built-in Gain Tax	p. 45
Affiliated Corporations	p. 46
Affiliated Corporations	p. 46
Consolidated Returns	p. 46
Corporate Acquisition Techniques	p. 53
Taxable Acquisitions; the Purchase and Sale of a Corporate Business	p. 53
Assets Sales and Acquistions	p. 53
Stock Sales and Acquisitions	p. 54
Tax Free Acquisitive Reorganizations	p. 56
The Fundamental Rules Governing Reorganizations	p. 56
The Basic Statutory Scheme	p. 56
The continuity of Shareholder Interest Requirement	p. 56
Qualitative and Quantitative Aspects	p. 56
The Continuity of Business Enterprise Requirement	p. 58
Tax Results to the Parties to a Reorganization	p. 59
Shareholders and Security Holders	p. 59
Stock for Stock Acquisitions: Type (B) Reorganizations	p. 60
Stock for Assets Acquisitions: Type (C) Reorganizations	p. 61
Triangular Reorganizations	p. 61
Acquisitive Type (D) Reorganizations	p. 63
Nonacquisitive Reorganizations	p. 65
Corporate Divisions: Spin-Offs, Split-Offs, and Split-Ups	p. 65
"Active Conduct of a Trade or Business, " "Device, " and Other Limitations	p. 65
Active Conduct of a Trade or Business	p. 65
Distribution of "Control" and Continuity of Interest Requirements	p. 68
Consequences to Parties to a Corporate Division	p. 68
Divisive Distributions in Connection with Acquisitions	p. 68
Corporate Attributes in Reorganizations and Other Transactions	p. 70
Carry Over and Limitation of Corporate Tax Attributes	p. 70
Limitations on Net Operating Loss Carryvoers Following a Change in Corporate Ownership	p. 70
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