S Corporations: Formation and Termination (Portfolio 730)

starr_samuel_2015

Samuel Starr

Special Counsel

IRS Office of Associate Chief Counsel - Pass-Through Entities

sobol-horacio-2015

Horacio Sobol

Partner

PricewaterhouseCoopers LLP

At a glance

I. Introduction
II. Qualification as a Small Business Corporation
III. Electing S Corporation Status
IV. Terminations: S Corporation Status and Shareholder Interests
V. Formation and Capitalization
VI. Procedural Issues
VII. State and Local Taxation

Abstract

Tax Management Portfolio, S Corporations: Formation and Termination, No. 730, reviews the rules regarding the formation and termination of S corporations. It examines the eligibility requirements which need to be met and the mechanics of filing the S corporation election form and shareholder consents, including the procedures for filing late S corporation elections and late shareholder consents. It also discusses the various ways an S corporation election may be terminated — either voluntarily or involuntarily — and the mechanisms for obtaining relief for an inadvertent termination and for obtaining permission to re-elect to be an S corporation within five years of a termination.

The Portfolio provides practitioners with an analysis of the legislative history behind the S corporation Code provisions. The Portfolio also discusses current state and local taxation issues confronting S corporations. For additional discussion of S corporations, see 731 T.M., S Corporations: Operations.

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