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In part 2 of this course, the importance of shareholder basis is emphasized. The annual basis adjustments, and an important election in the ordering of the computation are discussed. The differences between partnerships and S corporations are explored, especially when it comes to utilizing debt to create basis. The next area the course examines is the nature of the retained earnings and various memo accounts that S corporations can have, including such unusual acronyms as Accumulated Adjustments Account (AAA), Profits (E&P), Previously Taxed Income (PTI), and Other Adjustments Account (OAA). The importance of correctly defining Earnings and Profits is emphasized. Finally, the course describes the various entity level taxes that S Corporations may face, including the LIFO tax, the tax on Excess Passive Income, and the built-in-gains ( BIG) tax.

Course Series

This course is included in the following series:

Learning Objectives

  • Explore the concepts of basis and basis adjustments
  • Identify the importance of basis to shareholders
  • Recognize the differences between various equity and adjustment accounts, including Accumulated Adjustments Account (AAA), Earnings & Profits (E&P), Previously Taxed Income (PTI) and Other Adjustments Account (OAA)
  • Explore how to compute S Corporation entity level taxes, including Last In First Out (LIFO), Excess Passive Income and Built in Gains taxes
Last updated/reviewed: November 6, 2019

1 Review (10 ratings)Reviews

5
Member's Profile
Great introductory course to Sub S corporations and the tax issues associated with them.

Prerequisites

Course Complexity: Advanced

Complete course Taxation of S Corporations and their Shareholders Part I .

Participants should be aware of basic principles of income tax,  some familiarity with S Corporations will be helpful. 

 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  2:30Introduction to Taxation of S Corporations Part ll
  7:44Basis - S Corporations
  5:16Deducting Shareholder Losses
  9:54What's in Retained Earnings?
  8:00Entity-Level Taxes S Corporation
  12:31Tax on Built-In Gains
  11:35Terminating S Corp Election
  5:11Wrap Up
CONTINUOUS PLAY
  1:13:04Taxation of S Corporations Part ll
Supporting Materials
  PDFSlides: Taxation of S Corporations and their Shareholders Part II
  PDFTaxation of S Corporations and their Shareholders Part II Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM