Stop conflating basis and earnings—learn the precise ordering rules to avoid tax traps and optimize distributions.
Even though they have been around for several years, the tax laws pertaining to S corporations remain some of the more difficult areas of the Internal Revenue Code. Given the rising popularity of S corporations, understanding how shareholder basis and the equity section of the balance sheet work together for tax purposes is imperative for nearly any tax practitioner. In this course, we will discuss this relationship. Using examples and illustrations, we will show how contributions, operating transactions, and distributions affect both shareholder basis and equity.
This course provides a comprehensive overview of S-Corp tax principles, focusing heavily on the intricacies of shareholder basis, the Accumulated Adjustments Account (AAA), and retained earnings. It delves into the mechanics of calculating and maintaining accurate stock and debt basis, exploring how these figures directly dictate the taxability of shareholder distributions and the strict limitations on deducting losses. Furthermore, the curriculum examines the vital role of the AAA in tracking a corporation's undistributed earnings and clearly differentiates it from traditional accumulated earnings and profits, particularly when an S-Corporation has a prior C-Corporation history. By unpacking how these distinct accounting elements interact during everyday corporate transactions, this overview demystifies the strict compliance requirements of Subchapter S and highlights the profound tax implications for shareholders.
Who Should Attend:
CPAs and tax practitioners who work with S corporation business clients and S corporation shareholders.
CPA, CFP, CLU, CPCU, MST, MBA
David Peters is the Founder and Owner of Peters Professional Education in Richmond, VA. He is registered with the U.S. Securities and Exchange Commission (SEC) as an Investment Advisor Representative (IAR) with Peters Financial LLC. He brings over 20 years of experience in financial services, including three years in the hedge fund industry and six years in insurance. David was the first Chief Financial Officer of Compare.com, where he served for more than three years. He holds four master’s degrees, contributes frequently to professional publications, and is a nationally recognized CPE instructor and discussion leader for Surgent seminars and a former instructor for Don Farmer. David received the AICPA Outstanding Facilitator Award in 2021, 2023, and 2024 as well as Surgent's Outstanding Discussion Leader awards in 2019 and 2022. He also co-authored the Virginia CPA Ethics course in 2018, 2019, and 2020, which is a requirement for all CPAs licensed in Virginia. Through Peters Professional Education, David is the author and instructor for over 125 recorded on-demand CPE courses and leads private trainings, in-person tax seminars, and quarterly live tax update webinars. His areas of instruction include accounting, finance, insurance, financial planning, and ethics, and he regularly teaches professionals across the United States.
