by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
Partnerships are flow‑through entities, but certain transactions between a partnership and a partner are treated as if the partner were not a partner. These rules prevent partners from disguising sales, wages, or exchanges as partnership allocations. When a partner is...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
Form 1065 is the information return used by partnerships to report income, deductions, credits, and other tax items. A partnership is a flow‑through entity under IRC §701, meaning the partnership itself does not pay income tax. Instead, all items pass through to the...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
A partnership exists when two or more persons carry on a trade or business and share profits, losses, and responsibilities. For federal tax purposes, the definition is broader than the legal definition: under IRC §761, a partnership includes syndicates, groups, pools,...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
An S corporation is a domestic corporation that elects to be taxed as a pass‑through entity. Under IRC §1363, the S corporation generally pays no federal income tax. Instead, income, deductions, credits, and other items flow through to shareholders, who report them on...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
A stock redemption occurs when a corporation acquires its own shares from a shareholder in exchange for money or property. Under IRC §302, a redemption is treated either as a sale or exchange or as a dividend, depending on how much ownership changes. When a redemption...
