Subchapter S Bank Association Presdient, Patrick J. Kennedy Jr., was quoted in the April 25th American Banker article entitled, “S Corp Consolidation Could Be Side Effect of Basel III.” In the article Mr. Kennedy joins others in expressing concern that Basel III could be the last straw for countless S corporation banks as they mull their futures. As we all know, currently banks would be required by Basel III to hold a certain level of capital; failure to do so could result in a prohibition against paying dividends to shareholders. Dividends are critical to those investors, who rely on the payments to cover tax obligations if the bank is profitable. For that reason we strongly believe S Corps face a greater burden under Basel III than C corporations, where the company is taxed for its profit. Concerns also exist that the proposed rules could force more S Corps to delay growth plans or opt to sell themselves.
Archives for April 2014
The Sub S Bank Association was organized 17 years ago as a way of preserving, protecting and defending what its founders had achieved . . .
The genesis of the Subchapter S Bank Association came from the desire to drive value for community banks and their shareholders. During the last 17 years the Association has continued to work to protect that value and identify other ways in which Sub S banks can maximize their returns.
The Finance Committee is scheduled to meet today and the amendment list just released shows there’s lots of demand for tax policy within the Committee. Over 90 amendments have been filed. Some of the amendments could have a direct effect on Subchapter S banks. Specifically, two benefits being considered are:
• A two-year extension of the shorter, five-year holding period for built in gains; and
• A two-year extension of the provision allowing the full deduction of appreciated property from an S corporation to a charity.
These provisions have long been part of S Corporation Modernization legislation championed by Senators Cardin (D-MD), Hatch (R-UT), and Roberts (R-KS). Chairman Wyden’s goal is to adopt a pared-back list of extenders through the end of next year and then use that time to develop and pass a more permanent reform of the tax code: “This bipartisan extenders package is the product of a Finance Committee that came together to provide needed certainty to the economy, protect jobs and maintain important priorities for working families,” Wyden said. “With that said, I am determined this will be the last extenders bill on my watch. It’s high time we focus on creating a new, 21st-century tax code, because the status quo is unacceptable.
The Federal Financial Institutions Examination Council (FFIEC) issued a statements for financial institutions of the risks associated with cyber-attacks on Automated Teller Machine (ATM) and card authorization systems and the continued distributed denial of service (DDoS) attacks on public-facing websites. The statements describes steps institutions need to take to address these attacks and highlight resources institutions can use to help mitigate the risks posed by such attacks.