S Corporations: Current Developments (Part II) footnotes

⁵³For a discussion of the AJCA business provisions, see Karlinsky and Orbach, The AJCAs Domestic Business Provisions, 36 The Tax Adviser 148 (March 2005).

⁵⁴See Lutrell, S Corporation Returns, 2002, IRS Statistics of Income Bulletin (June 2005), p. 59.

⁵⁵TD 9170 (12/21/04).

⁵⁶The effective date for this portion of the new regulation is Dec. 22, 2004.

⁵⁷Colorado Gas Compression, Inc., 116 TC 1 (2004), revd, 366 F3d 863 (10th Cir. 2004).

⁵⁸See General Utilities & Operating, Co., 296 US 200 (1935). Under the General Utilities doctrine, a corporation could distribute appreciated property to its shareholders without recognizing gain. The Tax Reform Act of 1986 repealed this holding, by taxing the distributing corporation on such appreciated property.

⁵⁹See TD 9170, note 55 supra.

⁶⁰Typically, this would be in a tax-deferred reorganization, a Sec. 332 liquidation or a deemed Sec. 332 liquidation under the QSub formation rules.

⁶¹Such attributes include net operating losses (NOLs), consolidated losses, general business credits (GBCs) and minimum tax credits (MTCs).

⁶²Garwood Irrigation Co., TC Memo 2004-195.

⁶³C. Van Der AA Investments, Inc., 125 TC 1 (2005).

⁶⁴Coggin Automotive Corp., 292 F3d 1326 (11th Cir. 2002), revg 115 TC 349 (2000).

⁶⁵William H. Maloof, TC Memo 2005-75.

⁶⁶Veronica Chu, TC Memo 2005-110.

⁶⁷Diane S. Blodgett, 394 F3d 1030 (8th Cir. 2005).

⁶⁸Theresa E. Brady, TC Summ. Op. 2004-131.

⁶⁹Tony R. Carlos, 123 TC 16 (2004).

⁷⁰Under Regs. Sec. 1.469-2(f)(6), self-rental income is nonpassive.

⁷¹Fred Misko, Jr., TC Memo 2005-166.

⁷²Max M. Mason, 406 F3d 962 (8th Cir. 2005).

⁷³Alphonse Mourad, 121 TC 1 (2003), affd, 387 F3d 27 (1st Cir. 2004).

⁷⁴Lawrence G. Williams, 123 TC 144 (2004).

⁷⁵See Karlinsky and Burton, S Corporations: Current Developments (Part I), 35 The Tax Adviser 636 (October 2004).

⁷⁶See Notice 2002-65 Tax Shelter (5/9/05).

⁷⁷Notice 2002-65, 2002-2 CB 690.

⁷⁸See S Corporation Tax Shelter Notice 2004-30 (11/8/04).

⁷⁹Notice 2004-30, IRB 2004-17, 828.

⁸⁰Chief Counsel Advice 200344008 (10/31/03).

⁸¹Sutherland Lumber-Southwest, Inc., 114 TC 197 (2000), affd, 255 F3d 495 (8th Cir. 2001), acq., AOD 2002-002.

⁸²See Ebner, Tax Clinic, Maximizing the Deduction for Personal Use of an Aircraft, 36 The Tax Adviser 522 (September 2005).

⁸³TD 9183 (2/24/05) and Regs. Sec. 1.1361-4(a)(6)(iii).

⁸⁴TD 9209 (7/12/05).

⁸⁵TD 9164 (12/16/04).

⁸⁶See Zenz, 213 F2d 914 (6th Cir. 1954), revg 106 FSupp 57 (DC OH 1952). The case has given its name to a transaction in which a sole shareholder sells some shares and is then redeemed of all remaining shares. The redemption qualifies as a complete termination of the shareholders interest.

⁸⁷Richard E. Hurst, 124 TC 16 (2005).

⁸⁸IRS Letter Ruling 200453007 (12/29/04).

⁸⁹Rev. Rul. 67-274, 1967-2 CB 141.

⁹⁰IRS Letter Ruling 200430025 (7/23/04).

⁹¹IRS Letter Ruling 200519019 (5/13/05).

⁹²IRS Letter Ruling 200518034 (5/6/05).

⁹³IRS Letter Ruling 200435002 (8/27/04).