C Corporation Taxable Income, E&P, and Shareholder Transactions

This chapter covers the main C corporation compliance rules tested in TCP. The work centers on taxable-income computation, the use of losses and special deductions, the tax effect of shareholder transactions, and the role of earnings and profits in classifying distributions.

In This Chapter

• Corporate Taxable Income, DRD Limits, and Charitable Deductions covers the return-level starting point for C corporation tax computation.
• Corporate NOLs, Capital Losses, and Section 382 Ownership Limits explains how loss usage changes after ownership shifts.
• Shareholder Contributions, Redemptions, and Corporate-Level Consequences addresses how transactions between the entity and owners alter tax outcomes.
• Corporate E&P Calculations, Dividend Character, and Distribution Ordering shows how corporate distributions are classified for shareholder tax purposes.

How to Use This Chapter

• Work in order because loss usage and distribution character make more sense after taxable-income computation is clear.
• Revisit the E&P lesson whenever a redemption or distribution question changes character between dividend, return of capital, and gain.

In this section

• Corporate Taxable Income, DRD Limits, and Charitable Deductions
  Corporate taxable-income computation covering DRD limits, charitable deductions, and return-level adjustments.
• Corporate NOLs, Capital Losses, and Section 382 Ownership Limits
  C corporation NOL carryforwards, capital loss limits, and Section 382 restrictions after ownership changes.
• Shareholder Contributions, Redemptions, and Corporate-Level Consequences
  C corporation shareholder transactions covering property contributions, redemptions, and bailout risks.
• Corporate E&P Calculations, Dividend Character, and Distribution Ordering
  Corporate earnings-and-profits computation and the classification of distributions as dividends, return of capital, or gain.