General Rules for S-Corporation Distributions A Random Walk Down IRC 1368

Unless you elect different treatment, for shareholder income tax purposes S corporation distributions are applied in the following order: 1. To reduce the Accumulated Adjustment Account (AAA) determined without regard to any net negative adjustment for the tax year but not below zero. According to IRC 1368 if distributions during the tax year exceed the AAA…

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IRS Regulations on Deduction and Capitalization of Tangible Assets

The IRS has issued final regulations affecting all taxpayers that acquire, produce, or improve tangible property. The final regulations define materials, supplies, de minimus, safe harbor and related repairs as well as the election to capitalize certain materials and supplies among other items. Particularly relevant to my friends in Colorado suffering devastating losses from the recent…

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Individuals Exempt from the Affordable Care Act (Obama Care) Mandate

US citizens are required to carry minimum essential health insurance coverage beginning January 1st 2014. This is also commonly referred to as the ‘individual mandate’ and some people are exempt from this individual mandate including: Members of recognized religious sects that are exempt from self-employment tax. Members of health care sharing ministries. Individuals who are…

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Affordable Care Act Final Regulations Regarding Minimum Essential Coverage Maintenance

The IRS released final regulations regarding minimum essential coverage maintenance required under the Affordable Care Act for individual taxpayers under IRC 5000A governing the shared responsibility payment. The document is 75 pages long and I’ll be reviewing it over the next couple of days but I’ve pulled five examples directly below to help taxpayers try to…

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