S Corporation Election Form 2553 must be filed no later than 15th day of third month for year election is to be effective A new corporations tax year begins on first day it acquires assets, has shareholders or begins business All shareholder must consent to election 6
6 S Corporation Election Form 2553 must be filed no later than 15th day of third month for year election is to be effective –A new corporation’s tax year begins on first day it acquires assets, has shareholders or begins business All shareholder must consent to election
Termination of s Election (1of2) S election terminated when Corporation either voluntarily revokes the election (owners of more than 50% of the corporations stock must agree)or Corporation ceases to meet small business corporation requirements
7 Termination of S Election (1 of 2) S election terminated when –Corporation either voluntarily revokes the election (owners of more than 50% of the corporation’s stock must agree) or –Corporation ceases to meet small business corporation requirements
Termination of s Election (2of2) If termination occurs during tax year Portion of year prior to termination is a short s corp year and Portion of year after termination is a short C corp year Inadvertent termination can be undone New s corp election cannot be made for 5 tax years after termination 8
8 Termination of S Election (2 of 2) If termination occurs during tax year –Portion of year prior to termination is a short S corp year and –Portion of year after termination is a short C corp year Inadvertent termination can be undone New S corp election cannot be made for 5 tax years after termination