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...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
Corporate distributions can take the form of cash, stock, or property. Under IRC §301, the tax character of a distribution depends entirely on the corporation’s Earnings & Profits (E&P). How distributions are taxed Dividend A distribution is a dividend to the...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
Earnings & Profits determine how corporate distributions are taxed to shareholders. Under IRC §316, a distribution is a dividend to the extent of current E&P, then accumulated E&P, and only after both are exhausted does it become a return of capital or...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
Flat corporate tax C corporations, including personal service corporations, pay a flat 21% tax on taxable income under IRC §11. There are no brackets. All taxable income is taxed at the same rate. Corporate Alternative Minimum Tax (CAMT) The Corporate Alternative...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
C corporations may deduct charitable contributions made in cash or property to qualified organizations. The deduction is limited and follows strict income‑based and property‑based rules under IRC §170. Deduction limit A corporation may deduct charitable contributions...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
The Dividends Received Deduction allows a C corporation to deduct a portion of dividends received from domestic corporations. The rule prevents multiple layers of corporate‑level tax and encourages investment inside the U.S. corporate system. Only C corporations...
