S Corporation Stock Sales: Tax Efficiency and Transaction Costs

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Title:
S Corporation Stock Sales: Tax Efficiency and Transaction Costs
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Year: 
2010
Publication: 
Tax Notes
Volume: 
128
Issue: 
Start Page: 
309
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Language: 
English
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No License (All right reserved)
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Abstract:

S Corporation Stock Sales: Tax Efficiency and Transaction Costs

 

Mark W. Cochran

 

128 Tax Notes 309 (2010).

 

 

           Allowing buyers and sellers of S corporation stock to choose whether to close the corporation’s books leads to increased transaction costs. Inaccurate reporting can occur if the parties choose not to close the books.  Mandatory closing of the books, or a default rule of closing the books coupled with mandatory closing for extraordinary items, would decrease transaction costs and improve accuracy.

 

 

Keywords:  S corporations, tax analysis, stock sales, tax efficiency, tax costs, closing the books, Internal Revenue Code, Section 1377, S Corporation Special Rules, Section 1367, Basis Adjustments, Section 1368, S Corporation Distributions, Section 706, Partner Partnership Tax Years, Moline Properties v. Commissioner.

 

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