24) They observe that fiduciary duties between shareholders in a closely held corporation are necessary "because while a closely held corporation embodies the corporate form, it in many ways resembles a partnership.
While courts agree shareholders of a closely held corporation owe one another special fiduciary duties under special circumstances, they differ about when and to whom.
The focus of this article is on the treatment of passive losses by closely held corporations
IN CASES INVOLVING DIVORCING SPOUSES WHO OWN closely held corporations
, the courts have had conflicting opinions about the tax consequences to the spouses if the corporation, or one spouse, redeems the other's stock.
The operation of most buy-sell agreements in closely held corporations
is fairly straightforward.
The Internal Revenue Service guidelines for valuing stock in closely held corporations
are very general.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) reduced the individual tax rate on corporate dividends received to 15% for individuals in the 25%, 28%, 33% and 35% tax brackets (5% (0% in 2008) for individuals in the 15% and 10% income tax brackets); this affords some planning strategies for closely held corporations
that want to reduce their accumulated earnings and profits (E&P).
Of course, in some closely held corporations
, the wage-earning shareholders have substantial discretion in determining their own salaries.
The IRS carefully scrutinizes transactions between closely held corporations
and their controlling shareholders to make sure such transactions benefit the corporations, not simply the shareholders.
This may be particularly attractive for closely held corporations
The 1996 act lifts many of the prohibitive restraints in subchapter S corporation rules dating back to 1958 and expands the availability of S corporation status to many closely held corporations
that previously were ineligible.
Further, transactions involving closely held corporations
and their controlling shareholders demand close scrutiny.