S Corporation Exit Strategies

Author: Jennifer Kowal

Many S corporations are closely held businesses, founded and nurtured by a small number of shareholders. Just as the single level of tax on S corporations brings tax advantages while operating the business, it also offers several tax advantaged possibilities for exiting the business by some or all of the shareholders. This webinar covers the tax consequences of stock and asset sales (including 338(h)(10) transactions, stock redemptions, tax-free reorganization transactions, and IPOs.

Publication Date: May 2021

Designed For
Tax practitioners at all levels who advise S corporation clients.

Topics Covered

• Intro to key S corp features and limitations
• S corporation stock sales and asset sales, included section 338(h)(10) deemed asset sales
• Buy/sell agreement considerations
• Stock redemptions
• Tax-free reorganization transactions

Learning Objectives

• Describe the difference in tax consequences between S corporation stock sale and asset sale
• Recognize how to explain best practices for S corporation buy/sell agreements
• Describe examples of types of tax-free reorganizations that apply in S corp context
• Identify how to summarize tax treatment and mechanics of 338(h)(10) election by S corp shareholders
• Identify an advantage of an S Corporation compared to other types of legal entities
• Identify a business consequence of a stock sale vs. an asset sale
• Describe what it is when a corporation acquires its own stock from a shareholder in exchange for cash or other property
• Identify the first step in the ordering rules
• Recognize which doctrine is to prevent transactions that resemble sales from qualifying for non-recognition treatment as a corporate reorganization

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
A basic understanding of S corps.

Advance Preparation
None