PART III: Entity Tax Compliance (Area 2)

In this section

• Chapter 8: C Corporations
  • Corporate Income Computation & Special Deductions (DRD, Charitable Limits)
    Explore the fundamentals of calculating corporate taxable income, focusing on rules for the Dividends Received Deduction (DRD) and Charitable Contributions, including limitations and practical examples.
  • NOL & Capital Loss Utilization; §382 Limitations on Ownership Changes
    Explore C Corporation Net Operating Loss (NOL) rules, capital loss carryovers, and Section 382 limitations triggered by ownership changes, with practical examples and decision-tree diagrams.
  • Transactions Between Shareholder & Corporation (Property Contributions, Stock Redemptions)
    Explore the tax implications, corporate-level gains, and shareholder-level consequences of property contributions and stock redemptions in C corporations, while avoiding disguised ‘bailout’ pitfalls.
  • Corporate E&P Calculations & Dividend Treatment
    Explore the foundational concepts of Earnings & Profits (E&P), learn how to calculate current vs. accumulated E&P, and understand how these figures affect dividend versus return of capital classifications.
• Chapter 9: Consolidated Returns & Advanced Corporate Issues
  • Affiliated Groups, Membership & Filing Requirements
    Explore the criteria for parent-subsidiary control, consolidated return eligibility, and the complexities of partial-year acquisitions for CPA exam success.
  • Intercompany Eliminations & Deferred Gains
    Learn how to remove intercompany transactions from consolidated returns while properly deferring gains, ensuring a more accurate representation of economic reality in a corporate group’s tax computations.
  • SRLY (Separate Return Limitation Year) Rules & NOL Interactions
    Explore Separate Return Limitation Year (SRLY) rules for pre-acquisition net operating loss (NOL) usage under consolidated return regulations, and understand how these rules impact corporate tax planning and compliance.
  • International Corporate Tax: FDII, GILTI, BEAT, CFCs
    Discover the intricacies of FDII, GILTI, BEAT, and CFCs in international corporate tax. Understand compliance thresholds, inclusion rules, Subpart F, and planning strategies crucial for the CPA Exam (TCP).
• Chapter 10: S Corporations
  • Eligibility Requirements, Elections & Terminations
    Explore S Corporation permissible shareholders, single-class stock requirements, election procedures, and common pitfalls leading to unintended terminations. Master the essentials for tax compliance and planning under the TCP CPA blueprint.
  • Shareholder Basis, AAA, Debt Basis & Distributions
    Master essential S Corporation shareholder basis calculations, manage the Accumulated Adjustments Account (AAA) and debt basis intricacies, and learn to properly apply distribution ordering rules from AAA and E&P.
  • Built-In Gains Tax & Historical C Corp E&P Integration
    A comprehensive guide to understanding the built-in gains tax, tracking recognized built-in gains, and integrating historical C corporation earnings and profits when transitioning to or operating as an S corporation.
  • Ownership Changes & Mid-Year Allocations
    Explore how to handle partial-year ownership transitions in S corporations, focusing on daily vs. specific allocation methods and best practices for compliance.
• Chapter 11: Partnerships & LLCs
  • Formation & Contributions (§721) with Built-In Gain/Loss Property
    Explore how §721 impacts nonrecognition of gain or loss upon formation of partnerships and LLCs, with a focus on carrying over basis, built-in gains/losses, disguised sale rules, and intangible contributions.
  • Partner’s Outside Basis vs. Partnership Inside Basis
    Comprehensive coverage of how partners track outside basis and how partnerships maintain inside basis, including formulaic approaches and the role of ownership percentages in basis adjustments.
  • Special Allocations, Guaranteed Payments & §704(b)/(c) Rules
    Essential insights into special allocations of partnership items, guaranteed payments, and 704(b) and (c) rules, with in-depth discussions on substantial economic effect testing, and illustrative examples of guaranteed payments versus distributive share.
  • Distributions (Liquidating, Nonliquidating) & Disguised Sales
    Deep dive into partnership and LLC distributions, focusing on basis adjustments, liquidating vs. nonliquidating distributions, and disguised sales under the IRC.
• Chapter 12: Trusts & Tax-Exempt Organizations
  • Simple vs. Complex Trusts, Grantor Trust Rules
    Explore how income flows through simple and complex trusts, key distribution requirements, and essential reversionary powers causing grantor trust status for CPA exam readiness.
  • Fiduciary Accounting Income & Distributable Net Income
    Master key concepts of fiduciary accounting income, trustee authority over principal vs. income, and line-by-line DNI computations to excel in the CPA Exam’s Tax Compliance & Planning section.
  • Charitable Entities, §501(c)(3) Requirements & Private Foundations
    Explore the essentials of achieving and maintaining tax-exempt status under §501(c)(3), the operational and organizational tests, Form 990 compliance, and private foundation excise tax rules in the context of the Uniform CPA Examination (TCP).
  • Unrelated Business Income & Exceptions (Volunteer Labor, Research)
    Discover the intricacies of Unrelated Business Income (UBI) for tax-exempt organizations, focusing on volunteer labor, research exceptions, net operating losses, and fragmentation rules through comprehensive analysis and real-world examples.