A quarterly magazine from the National Association of Enrolled Agents
Summer 2026 vol.44 no.2
Why Language, Not Math, Is the First Thing That Goes Wrong with Entity Structure Problems
Tax Planning

Why Language, Not Math, Is the First Thing That Goes Wrong with Entity Structure Problems

Consider the following scenario: Two founders form a limited liability company (LLC) taxed as a partnership. For years, they have referred to their interests as “stock.” When one founder exits, they describe the transaction as a “stock sale.” The buyer as... Juan Ojeda Jr.

Spring 2026, Tax Planning, partnership, LLC, limited liability company, stock, §754
Do Disproportionate Distributions Terminate an S Corporation Election?
Tax Court

Do Disproportionate Distributions Terminate an S Corporation Election?

S corporations cannot have more than one class of stock.i Based on this prohibition, many tax professionals believe that an S corporation that makes disproportionate distributions to shareholders terminates its S corporation e... Thomas A. Gorczynski, EA, USTCP

Spring 2025, Tax Court, s corporation, c corporation, Tax Court, Form 1040, stock, §1362(d)(2), Maggard and Chang, disproportionate distributions, shareholders, private letter ruling, liquidation
Will Your Client’s LLC Operating Agreement Make an Election Under Subchapter S Invalid?
Feature Article

Will Your Client’s LLC Operating Agreement Make an Election Under Subchapter S Invalid?

Organization of a business enterprise as a limited liability company (LLC) has a number of advantages. In addition to ease of formation, state LLC acts dispense with many of the formalities required for corporations and wide latitude is given to... Patrick D. Dimmitt

Fall 2024, Feature Article, s corporation, employee, election, LLC, Form 1120-S, safe harbor, debt, limited liability company, Form 8832, §1362(f), stock, §1361(1)(D), Treasury Regulation §1.1361-1(l)(1), §338(h)(10), Subchapter S, Private Letter Ruling 201949009, Private Letter Ruling 201930023, Private Letter Ruling 202315005, Private Letter Ruling 202110010, §704, §83(b), Treas. Reg. §1.704-1(b)(2)(ii)(b)(2), Private Letter Ruling 202111011, Private Letter Ruling 202310001, Uniform Limited Liability Company Act, ULLCA, §105(b), Rev. Proc. 2022-19, §3.06, Corporate Governing Provision Statement, §3.06(d), Treas. Reg. §1.704-1(b)(2)