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Choice of Entity Considerations Under the Current Tax Law

Author/Moderator: Charles Borek, CPA, JD, MBA
Publisher: AICPA
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Choice of entity issues are relevant throughout the life of a business. When starting a new business, a crucial first decision is choosing the correct form of entity to accomplish the company’s goals. Likewise, it is equally important to know when an entity change is needed as well as the tax consequences of the sale or liquidation of the various forms of doing business. This CPE course targets the ever-increasing tax advantages and disadvantages of general and limited partnerships, C and S Corporations, LLCs and LLPs, as well as individual proprietorships. It will help you hone in on the key issues surrounding the myriad of factors that drive the optimal form of organization for a business. The course also includes several case studies from real-life client situations.

Topics Discussed:

  • Tax consequences of formation under various entity types
  • Transfers to a corporation
  • Transfers to a partnership
  • Series LLCs
  • S Elections
  • Allocations in Flow-through Entities
  • Distributions by Corporations, Partnerships, and S corporations
  • Sales and Reorganizations

Learning Objectives:
When you complete this course, you will be able to:

  • Identify which entity forms do and do not provide a business owner with protection from personal liability for business debts
  • Calculate the gain or loss to be recognized when property is transferred to a corporation in exchange for stock
  • Determine the gain or loss recognized when property encumbered by debt is transferred to a partnership in exchange for partnership interests
  • Determine a partner’s basis in a partnership interest received in exchange for property
  • Identify the requirements for a Code Section 351 tax-free contribution of property to a corporation in exchange for stock
  • Identify substantial economic effect with respect to partnership allocations
  • Identify the three methods of making Section 704(c) allocations specified in the regulations
  • Determine whether, under a given set of circumstances, a partnership may disregard the allocation rules of Section 704(c)
  • Identify the structure and consequences of using stock appreciation rights (SARs)
  • Calculate the effect of a distribution on the basis of an S corporation stockholder’s shares and a partner’s partnership interest
  • Distinguish the effects of a distribution of appreciated property in the context of a C corporation, an S corporation, and a partnership
  • Choose the correct order of accounting for distributions from S corporations having earnings and profits
  • Distinguish between the methods of effectuating corporate divisions by means of split-ups, slit-offs, and spin-offs, respectively
  • Identify the consequences of a partnership merger
  • Indicate the tax consequences of an S corporation liquidation

Who Will Benefit?
CPA firm seniors (and above) and other tax professionals looking for the best techniques to select various entity forms to solve their clients’ tax and business problems

Prerequisite: Experience in business taxation

Advanced Preparation:  None

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NASBA Field of Study: Taxes
Level: Advanced
Recommended CPE Credit: Text - 11; On-Demand - 9.5
Choice of Entity Considerations Under the Current Tax Law
Text , 2015
Product# 753386
Availability: In Stock
AICPA Member:$179.00
Your Price:$229.00
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