Strafford Webinar: S Corp Redemptions: Characterization, Tax Consequences, Application of Sections 302 and 301

Pillsbury partners Mike Kosnitzky and Keith Blum will present during this upcoming Strafford webinar to discuss the potential tax pitfalls of S corporation redemptions and sale or exchange versus distributions under Sections 302 and 301, as well as offer best practices and tax planning techniques in structuring transactions.

Event Contact
Meredith Kintner

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This CLE/CPE course will provide tax counsel and advisers with a specific and practical guide to navigating the tax rules that apply to the redemption of S corporation interests. The panel will discuss characterization as a sale or exchange versus distribution, tax consequences associated with such transactions under the new tax law, application of Sections 302 and 301, and available planning techniques to structure transactions and avoid unintended tax liability.

Transfer of ownership of an S corporation can be accomplished via redemption of the shareholder's interest by the S corporation rather than a sale of the shares to a third party. Redemptions can result in significantly different tax treatment than sales, and tax counsel and advisers must grasp an understanding of the applicable tax rules in structuring these transactions.

The enactment of new tax law has caused shareholders of S corporations to consider a variety of transactions impacting their ownership interests to take advantage of any potential tax savings, including contemplating a subsequent conversion to a C corporation. S corporations engaging in shareholder redemptions can optimize tax treatment if such transactions are structured correctly.

A redemption qualifying as a sale or exchange rather than characterized and taxed as a dividend is one of the key concerns when structuring these transactions. Also, tax counsel and advisers must be aware of the potential pitfalls of such deals under Sections 302 and 301 and contemplate the impact of specific provisions stemming from tax reform.

The panel will review these and other key issues:

Structuring S corporation redemptions post-tax reform
Under what circumstances would redemption be disadvantageous to the S corporation or shareholders?
Application of Section 302 and meeting the requirements of a sale or exchange and exceptions
The application of constructive ownership under Sec. 318 about Sec. 302
Tax consequences of distribution under Section 301
Best practices and planning opportunities in structuring redemptions

For more information and to register, please see the event page.

Pillsbury Panelists

Michael Kosnitzky

Partner

Sponsor

Strafford