Many C corporation benefits, such as health insurance, are not subject to either ordinary income taxes or employment taxes, while fringe benefits offered by other business entities are always subject to employment taxes.
Income can be split between the owners and the corporation to reduce overall taxes.
Many S shareholders have two investments in the corporation - the investment in corporate stock and loans made to the corporation.
Generally, a shareholder will want to sell stock while a buyer will want to purchase assets.
Selling stock in a C corporation will yield a capital gain or loss measured by the purchase price less the seller’s basis in stock.
The proposals list an ordering rule for the adjustment, either increases or decreases, of stock basis.
They also include provisions on the timing of basis adjustments, basis computations during a loss year, computation of individual stock basis and the categorization of debt as basis.