C Corporations Update: Lobster Traps, Pots and a Whole New Sea of Opportunity

Author: Bradley Burnett

What Does the New Lower Rate for C Corps Mean for Your Business or Clients?
C Corporations carry unique blessings and curses of all their own. But, what of all this new fuss about how S Corps and other entities should switch to C Corps? The Tax Cuts and Jobs Act brought new lower tax rates for C corporations and that means more businesses are taking a close look at this entity. But is it the right answer? C Corp income tax rates are newly lower for some and higher for others. But, there’s a whole lot more to the story. With experienced practitioner and instructor Bradley J. Burnett, J.D., this course kisses and tells about the C Corp rest of the story. This is a must-attend course for all tax professionals who advise business clients.

Publication Date: January 2019

Designed For
All CPAs, EAs, corporate tax staff, and tax professionals who desire to understand the new playing field for C Corps after recent tax legislation, how to save money in taxes and optimally structure small business entities.

Topics Covered

• C Corporation New Tax Developments
• 2018 Form 1120 — What's New?
• Form 8938 and Penalty for Non-filing
• Form 1120 — Late Filing Penalty
• IRS Interest
• IRS Exam Rates — C Corps
• Tax Cuts and Jobs Act
• Choice of Business Entity
• TCJA — §199 Manufacturer's Deduction (DPAD)
• QBI Deduction Applies to Non‐C Corps
• TCJA — Corporate Tax Rates
• TCJA — Corp Tax Rates — Blended for 1st FY Ending After 2017
• TCJA — C Corp AMT
• TCJA — AMT Repeal — Rate Blended for 1st FY Ending After 2017
• TCJA — C Corp MTC Carryover
• Buy Sell Agreements
• C Corp AMT and Buy Sell Agreements
• C Corp Income Tax Structure
• Dividends Received Deduction
• Should You Switch to a C Corp?
• C Corps are Like Lobster Traps
• Distribution of appreciated assets from C Corp treated as sale (and, thus, a taxable event)
• C Corps and the "Splitting Tax Rate" Game
• TCJA and Lower Income C Corps
• Accumulated Earnings Tax (AET)
• To Be or Not to Be a C Corp — 4 Reasons
• Pass‐Through vs. C Corp — Recent Stats
• High Income C Corps
• High Income — Pass‐Through vs. C Corp
• C Corps w/ Justification to Retain Earnings
• C Corp §1202 (QSBS) Stock
• §1245 Rollover of §1202 Stock
• §1202 Stock Planning Pointers
• C Corp vs. Non‐C Corp
• C Corp vs. Pass‐Through
• TCJA — S Corp Conversions to C Corp
• Should You Switch from C to S Corp?
• Management Fees
• Debt vs. Equity — Regulations
• Controlled Entity Loans
• Debt vs. Gift
• Dividends
• §351 Transactions
• Compensation
• TCJA ‐ §163(j) Business Interest Expense Limit
• How Does §163(j) Vary with Entity Type?
• Deduction for Employee Parking Bites Dust
• Exempt Organizations
• Qualified Improvement Property (QIP)
• TCJA — Business Entertainment and Meals

Learning Objectives

• Recognize how to remove the mystery from the pros and cons of C corp choices under TCJA
• Differentiate four situations where a C Corp is better than pass-through (for entrepreneurial business
• Identify and apply new developments affecting C Corps
• Differentiate types of C Corporations that have the highest IRS audit rate
• Identify the new C Corporation Tax Rate after passage of the TCJA
• Recognize the new QBI deduction percentage for qualifying pass-through income for S Corps, partnerships, and sole proprietorships
• Describe which entity had double tax, based on the comparison of C Corp vs. Non-C Corp entities
• Identify the deduction for business interest expense cannot exceed the sum for tax years beginning after December 31, 2017
• Recognize the beginning phase-out range for the Section 179 expense election for years beginning in in 2018
• Describe the new Corporate tax rates simplified from five to six rates to how many rates beginning in 2018
• Identify the new minimum penalty for late filing of Form 1120 beginning in 2018
• Describe which type of C Corp entity has the lowest IRS audit rate according to the 2017 Data Book
• Identify the new top tax rate under the TCJA for pass-through income
• Identify the new AMT rate for C Corps for years after 2018
• Identify the tax imposed on certain entities for earnings that are viewed to be beyond reasonable needs of the business
• Differentiate reasons to remain as a C Corp
• Recognize the percentage of taxable income certain disaster relief rules, the charitable contribution deduction for C Corps is limited to

Level
Update

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
A basic understanding of C Corporations. and federal income taxation concepts.

Advance Preparation
None