by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
Related‑party rules Section 267 prevents a corporation using the accrual method from deducting expenses owed to a related person who uses the cash method until the amount is actually paid and included in the recipient’s income. This rule blocks timing mismatches where...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
A domestic corporation must file an income tax return for every year it exists, even if it has no income, no activity, or is in bankruptcy. The return is filed on Form 1120, which reports income, deductions, credits, and tax liability. Filing deadlines A corporation...
by Turquoise Tax Systems | Jun 17, 2026 | Business Tax
A Section 351 exchange lets a taxpayer transfer property to a corporation in return for stock, without recognizing gain or loss, as long as the transferors have control immediately after the exchange. Control means owning at least 80% of voting power and 80% of each...
by Turquoise Tax Systems | Jun 16, 2026 | Business Tax
Certain entities are automatically taxed as corporations under federal law, while others may elect corporate status. Corporate taxation applies regardless of the business’s internal structure when the Internal Revenue Code requires it. Entities Automatically Taxed as...
by Turquoise Tax Systems | Jun 16, 2026 | Business Tax
Section 1031 allows nonrecognition of gain when a taxpayer exchanges real property held for business or investment for other real property of like‑kind. Since 2018, only real property qualifies. Personal property no longer qualifies. What Qualifies as Like‑Kind Real...
by Turquoise Tax Systems | Jun 16, 2026 | Business Tax
Basis is a taxpayer’s investment in property for tax purposes. It determines: Gain or loss on sale Depreciation Amortization Depletion Casualty loss deductions If property is used partly for business and partly for personal purposes, basis must be allocated by use....
