Electing S corporations may find it desirable or necessary to terminate this election and convert to a C corporation. Alternatively, qualifying C corporations may determine the S status to be the preferred tax status. Terminating or electing S corporation status can be desirable with important current and future tax considerations. We'll consider situations when such conversions are desirable-identifying and discussing tax planning opportunities and complications at conversion.
Learning Objectives
- Discuss and analyze situations where terminating an S corporation election could be desirable.
- Consider common situations where S-election may involuntarily terminate.
- Understand the process and tax planning opportunities related to a voluntary revocation.
- Evaluate complications related to mid-year termination of S corporation status.
- Discuss and evaluate limitations on re-electing S corporation status.
- Consider tax result from making the S corporation election - how and the why
- Discuss built-in gain tax planning.
Major Topics
- Reasons to terminate an S corporation election
- Involuntary terminations
- Voluntary revocations the process and the consequences
- Tax planning opportunities related to the termination of S corporation status
- Complications arising from a mid-year termination
- Limitations on re-electing S corporation status
- Making the S corporation election how and why
- Built-in gain planning
