Subchapter S community banks offer a variety of services in their communities to complement their core lending services, the senators wrote.
The relevant facts enumerated in the ILM are as follows: (1) An S corporation owned a qualified
subchapter S subsidiary (QSub); (2) the QSub was placed in receivership because of its precarious financial condition; (3) the S corporation and its shareholders wanted to pass through an ordinary deduction before the QSub was placed in receivership; and (4) the S corporation therefore terminated its S corporation status, which caused the QSub to become a C corporation immediately before the termination of its parent's
Subchapter S status.
2013-30 provides procedures within its scope that are in lieu of the private letter ruling (PLR) process ordinarily used to obtain relief for a late "Election Under
Subchapter S" (defined below) pursuant to IRC Sec.
Soon after subchapter K's codification, Congress introduced a second, simpler pass-through system--
subchapter S -into the federal income tax.
Conversely,
Subchapter S corporations generally do not pay tax on profits.
Sid and Al Ruckriegel were 50% shareholders in Sidal Inc., a
subchapter S corporation, set up in Indiana.
When selling their businesses, most owners of small C corporations will pay double the tax that they would have paid were they an LLC or
Subchapter S corporation.
The letter contained nine specific recommendations for reform of
Subchapter S, including those to allow (1) electing small business trusts to deduct interest incurred to acquire S corporation stock, (2) a shareholder debt basis increase for certain related-party of "back-to-back" loans, and (3) repeal of the LIFO recapture tax.
Note the breathtaking implications if in the future this decision is extended beyond
Subchapter S corporations, to include other business arrangements, such as partnerships, individual proprietorships, or limited liability corporations where there are pass-throughs of tax liability.
These figures included companies that had zero earnings as well as Subchapter C and
Subchapter S corporations.
They were the possibilities that a smaller corporation's shareholders might elect to be taxed under
Subchapter S of the Internal Revenue Code or that a partnership might be established as a limited partnership.
"If you were a
Subchapter S, the LLC saves you potential built-in gains tax issues," Anderson said.