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I did an analysis of a conversion from S to C for my largest S Corporation client back in March. My conclusion was that while the gap is definitely narrowed, it was still advantageous for my client to remain an S Corp. If a client wants to load up on fringe benefits, including a customized defined benefit plan, then I think a C Corp would be the way to go.

I see a class action lawsuit based on it being against both the US Constitution and (to my knowledge) all state constitutions that ex post facto (after the fact) laws are NOT allowed. The feds/states may NOT treat as transgressions actions that were legal at the time made.

I'm in NY and usually 3 back years (14,15, 16, & 17) will do just fine. I tell my client let them ask us if they (IRS or NY) want more. I can't remember a case where they have come back asking for additional years. As Max W. says they just don't have the manpower.

The State of California is so obsessed with taxes that it has three separate tax departments. The Franchise Tax Board whose domain is income tax enforcement; the Board of Equalization that handles sales taxes; and the EDD, Employment Development Department, that takes care of collecting UI and SDI payments. Each is separate and independent of each other. As Deb says, the FTB is very tenacious, like a pit bull that won't let go. I've had clients that have had to file returns as long as 23 years ago (there is now a SOL of 20 years). other clients that moved out of CA to a non-tax state and were pursued there because the client had not severed all ties to CA, such as forgetting to have their name taken off the voter registration list, or having a PO Box in CA, or not being able to show proof of having their drivers license, or vehicle reg. in the new state. To assess some non-filed returns, the FTB makes up imaginary income numbers. Sometimes the mortgage interest paid is mulitiplied by 4 and that becomes the income figure, which is then taxable. Other times, they will take the average income of specific types of businesses, such contractors, insurance sales, etc., and base the assessment on some multiplier of that. At least the IRS use real numbers for such purposes. One good thing the FTB has done since the first of the year, is to adopt the IRS National Standards for living expenses in calculating collection potential.

It is something to think about. Tom Modesto, CA

They all walk to work? What a co-incidence, right? It's a miracle!! Yes rule is utterly stupid, but it already is basking in the bright sunlight of day. In particular, non-religious people have been banging on tax-exempt status for 40 years in order to raise property taxes on churches. The same crowd is not as anxious to tax hospitals, schools, etc. I hope the constituency wakes up and bangs on congress to rescind this sneaky provision. I agree with others - apparently it was intentionally put in.

He shouldn’t have any mortgage boot as long as the new debt is more than the old debt. There isn’t any depreciation recapture if the new property has a higher Basis than the old property.

Here's a collection of useful links and articles: https://www.councilofnonprofits.org/how-tax-cuts-jobs-act-impacts-nonprofits

If your S corp operates in CT, there is now a state entity tax of 6.99% so it will have a CT liability. The shareholders will get a 93.01% credit on their individual returns. This was passed to dance around the $10k cap on SALT deductions for individuals. If any of you have partnerships that operate in CT, they too are subject to the entity tax. And by the way, although this wasn't signed into law until the end of May, pass-through entities are now two quarters behind in their state ES payments. Penalty waivers will be granted if the individuals paid their own ES on time and elect to let the entities claim the payments. Otherwise the entities will have to pay penalties for not following a law that was not passed until it was too late to make payments they didn't know about. CAN YOU BELIEVE IT???