Think about a company's tax plan and how this impacts decision-making when considering taxation and consider what you have learned about S corporations:

1. Summarize the limitations that apply to the amount ofloss pass-through an S corporation shareholder can deduct. Consider the following in your response:
   1. Losses exceeding this limitation
   2. Stock transfers from a shareholder
   3. Limitations of loss and the calculation of basis are accounted for per the current tax regulations
2. Describe thethree hurdlesa taxpayer must pass if they want to deduct a loss from their share in an S corporation. Determine the hurdle you think provides the greatest challenge for a taxpayer. Consider the following in your response:
   1. Limitation rules and their impact on the deductibility of losses from an S corporation
3. Describe how an S corporationdetermines a reasonable salaryfor its shareholder or employee. Consider the following in your response:
   1. Factors that must be considered
4. Provide apotential tax planning strategyrelated to a shareholder or employee compensation to reduce the overall tax liability of the shareholder. Consider the following in your response:
   1. Tax savings for shareholders under various classifications of compensation.

Answer rating: 100% (QA)

Limitations on Loss PassThrough Deductions for S Corporation Shareholders S corporation shareholders are subject to limitations on the amount of losse... View the full answer