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C corporations are generally subject to double taxation: once at the corporate level when income is earned, and again at the shareholder level when that income is distributed. In contrast, S corporations typically are not taxed at the corporate level. Instead, their income and deductions flow through to the shareholders when earned. Distributions from an […]

In June 2024, the U.S. Supreme Court issued a unanimous decision in Connelly v. United States, a case with far-reaching consequences for business owners—especially those operating closely held corporations with life insurance-funded buy-sell agreements. The Court determined that life insurance proceeds received by a corporation to redeem a deceased shareholder’s shares must be included in

Backdoor Roth IRA: A Strategic Retirement Planning Tool for High-Income Individuals A Backdoor Roth IRA is a legal and effective strategy that allows high-income earners, who exceed the income limits for direct Roth IRA contributions, to still benefit from the tax advantages of a Roth account. This method involves contributing to a traditional IRA and

The IRS has released a draft version of Form 7217, Partner’s Report of Property Distributed by a Partnership, which partners must use starting with the 2024 tax year to report their tax basis in property distributed to them by partnerships. This new requirement aims to enhance transparency by requiring partners to disclose details such as

The Treasury Department announced today that it will not enforce any penalties or fines related to the Corporate Transparency Act’s beneficial ownership reporting rule, both under existing deadlines and after upcoming regulatory changes. Additionally, a proposed rule will be introduced to limit the reporting requirement to foreign companies only. This move aims to support American

The Qualified Business Income (QBI) deduction offers owners of pass-through entities a significant tax advantage by allowing a deduction of up to 20% of their qualified business income. However, maximizing this deduction requires careful consideration of various factors, including taxable income thresholds and wage limitations. Understanding the 2/7 Rule: For taxpayers whose taxable income exceeds

Sec. 501(c)(3) organizations engaging in fee-for-service activities must determine whether these activities advance or are “substantially related” to their exempt purpose. This distinction is critical for maintaining tax-exempt status and avoiding the unrelated business income tax (UBIT). Generally, services are not considered substantially related simply because they are provided to other tax-exempt organizations or offered