Naila Posted December 10, 2016 Report Share Posted December 10, 2016 My client has S Corporation. He wants to revoke S Corp election. The S Corp has around $45,000.00 negative retained earning in balance sheet. He already took benefit of this loss through K-1 during previous years. If the corporation is converted into C corp, what will be the treatment of these previous losses. Quote Link to comment Share on other sites More sharing options...
OldJack Posted December 10, 2016 Report Share Posted December 10, 2016 Nothing... the sub S account becomes frozen on the Corp books (still shown as AAA account) and a new account is established for the C-Corp. Remember if S status is terminated on any date other than the first day of the year you must file 2 tax returns one as 1120S and the other as1120. You can file your revoke and elect to make it effective on the first day of the year. 1 Quote Link to comment Share on other sites More sharing options...
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