Overview

This case-driven training is designed to get the inexperienced accountant up to speed quickly in the most common areas of S-corporation taxation. The cornerstone of this course is the preparation of the Form 1120S using a fairly complex trial balance common to most S corporation income tax returns.

Learning Objectives

Once participants have completed this session, they should be able to:

• Prepare a complete Form 1120S income tax return and related schedules with minimal review points

• Understand the S corporation income tax law from a tax-form perspective and become more knowledgeable with the information gathering process (i.e. asking the right questions)

Course Highlights

This session is taught using a Hands-On methodology.  Using a comprehensive trial balance, the participant will walk through the steps to prepare a complete and accurate Form 1120S (and related schedules). Each participant will receive a comprehensive S corporation income tax reference manual that includes numerous practice aids, real world examples, new Federal income tax forms and schedules, and Pat Garverick’s Quick Reference Chart.  Topics include:

• Extensive review of the S corporation income tax laws with an emphasis on any new legislative changes (i.e., The Big Beautiful Bill) including the expiration or extension of any TCJA provisions after 2025
• Schedule K analysis– determine if income statement items are separately (i.e. schedule K) or non-separately stated income and expense items
• Discuss how schedule K items get allocated to shareholders on their schedule K-1s
• Look at detailed Schedule K-1 information reporting to shareholders needed for the qualified business income (QBI) deduction, 3.8% net investment income tax and business interest expense limitations
• Talk about the unreasonably low officer compensation issues
• Learn the special tax treatment of fringe benefits paid to 2% shareholders and family members
• Schedule M-1 – calculate the reconciliation of income or loss per books with income or loss per income tax return
• Schedule M-2 – detailed step-by-step calculation of the AAA, PTI, E&P and OAA accounts
• Basic overview of the tax treatment of distributions including when a S corporation has prior C corporation earnings and profits (E&P)
• Review the importance and basics of calculating a shareholder’s stock and debt basis
• Basic overview of the potential S corporation built in gains tax from the conversion of a C to S corporation