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The Effect of Bankruptcy on a Subchapter S Election
A new tax case from the U.S. Tax Court addresses the question of whether the filing of a Chapter 11 case by a Subchapter S corporation terminates the company's Subchapter S election. This case is important to the shareholders of a Subchapter S corporation that might have post-petition taxable income.
Background
Most closely held corporations have filed Subchapter S elections for sound tax planning purposes. A Subchapter S corporation (S Corp.) is generally not subject to an income tax at the corporate level. Rather, the shareholders pay tax on the S Corp.'s income. On the other hand, a corporation that has not filed the Subchapters S election is governed by Subchapter C of the Internal Revenue Code (C Corp.). A C Corp. is subject to federal corporate income tax at the corporate level, at rates up to 35%. The marginal tax rate for a C Corp. climbs rapidly to 34% for taxable income of over $75,000, so the top tax rate kicks in at much lower income bracket than for an individual. In addition to the federal tax, states also impose their own corporate income tax. The combined federal and state tax can result in a combined tax rate of over 40% in some states. Furthermore, a C Corp. does not get the benefit of the 15% tax rate on long-term capital gains available to individuals.
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Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.