Calculating S Corp Accumulated Adjustment Accounts: Mastering the Section 1368 Ordering Rules
Minimizing Tax on Distributions, Navigating the Interplay Between Shareholder Basis and Corporate AAA Balance
Recording of a 110-minute CPE webinar with Q&A
This course will provide tax professionals and advisers with the tools and understanding to correctly calculate an S corporation's accumulated adjustments account (AAA) and to effectively advise clients to avoid negative tax consequences due to loss limitations or excess distributions. The panel will contrast AAA calculations with those of shareholder basis, tie AAA to the related concept of retained earnings in C corporations, and identify specific challenges in calculating AAA and in resulting tax planning and compliance.
Outline
- Accumulated adjustment account vs. shareholder basis
- AAA when the S corporation has accumulated E&P
- Impact of AAA on tax treatment of distributions for S corps with E&P
- Calculating AAA
- Ordering rules of Section 1368 and regulations
- Income and gains
- Losses and deductions
- Non-dividend distributions
- Net negative adjustments
- Other adjustments account issues
- Available elections
Benefits
The panel will discuss these and other important topics:
- What is the interrelation between an S corp shareholder's stock basis and the S corp AAA balance?
- What is the impact of E&P on AAA calculations and on tax treatment of distributions from an S corp that has E&P?
- What are the ordering rules for allocating AAA adjustments of income, gain, and loss?
- What items are included in other adjustments accounts?
Faculty
Professor Robert W. Jamison, CPA
Professor Emeritus of Accounting
Indiana University
Mr. Jamison is Professor Emeritus of Accounting at Indiana University, Purdue University, Indianapolis (IUPUI). His... | Read More
Mr. Jamison is Professor Emeritus of Accounting at Indiana University, Purdue University, Indianapolis (IUPUI). His principal area of specialization is S Corporations. He is the sole author of S Corporation Taxation, and co-author of Multistate Tax Guide to Pass-Through Entities, both of which are published annually by CCH, a Wolters Kluwer business. He is a regular contributor to Land Grant University Tax Education Foundation, Inc. National Income Tax Workbook and has contributed to Federal Tax Workshop. He presents advanced and update S Corporation seminars for various states' CPA societies and to other professional organizations. He is a member of the AICPA S Corporation Technical Resource Panel. He consults on S corporation and other business entity problems and has secured letter rulings from the IRS.
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Brian T. Lovett, CPA, JD
Partner
Withum Smith+Brown
Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses,... | Read More
Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses, including all aspects of tax compliance for partnerships and corporations. He advises clients with regard to the structure and tax consequences of new business ventures, and assists with restructuring existing businesses for increased tax efficiency. Prior to joining his firm, he was with a “Big 4” accounting firm, working closely with large, multinational real estate investment companies.
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