mircpa Posted May 8, 2008 Report Share Posted May 8, 2008 Hi everyone Have a client who has a S corporation, new individuals are buying common stock/shares of this corporation, my question, does S election stands cancelled from Jan 1 2008 or from date of stock sale transaction, (eg today's date), new shareholders does not want S election, or does corporation files 1120S from Jan 1 until today's date and 1120 for remainder of year ? Quote Link to comment Share on other sites More sharing options...
jainen Posted May 8, 2008 Report Share Posted May 8, 2008 >>new shareholders does not want S election<< The corporation can file a formal revocation with statements from consenting shareholders, effective next January 1. Or they can trigger automatic disqualification, such as by transferring stock to an ineligible shareholder. It seems kind of late to be asking this question. Quote Link to comment Share on other sites More sharing options...
mircpa Posted May 9, 2008 Author Report Share Posted May 9, 2008 thanks jainen Quote Link to comment Share on other sites More sharing options...
PapaJoe Posted May 9, 2008 Report Share Posted May 9, 2008 "...does S election stands cancelled from Jan 1 2008 or from date of stock sale transaction, (eg today's date)" If today's date is date of stock sale, then it's not 'kinda late' to be asking. Quote Link to comment Share on other sites More sharing options...
mircpa Posted May 9, 2008 Author Report Share Posted May 9, 2008 Have seen cases where previous owners file 1120S until the time sale transaction took from Jan 1 AND new owners file 1120 from sale transaction, i.e. today's date until Dec 31 Quote Link to comment Share on other sites More sharing options...
jainen Posted May 12, 2008 Report Share Posted May 12, 2008 >>Have seen cases where previous owners file 1120S until the time sale transaction took from Jan 1 AND new owners file 1120 from sale transaction<< Are you saying that is the correct way? Or that it is okay to do it because somebody else did it first? Or something else? Quote Link to comment Share on other sites More sharing options...
mircpa Posted May 12, 2008 Author Report Share Posted May 12, 2008 >>Have seen cases where previous owners file 1120S until the time sale transaction took from Jan 1 AND new owners file 1120 from sale transaction<< Are you saying that is the correct way? Or that it is okay to do it because somebody else did it first? Or something else? All i am trying to do is get a strategy, dont you think stock transfer to ineligible shareholders automatically triggers disqualification, if that is the case since when the corporation losses S status from Jan 1st 2008 or today's date or jan 1st 2009 ? Quote Link to comment Share on other sites More sharing options...
jainen Posted May 12, 2008 Report Share Posted May 12, 2008 >>stock transfer to ineligible shareholders automatically triggers disqualification<< Yes, you have two short years as of the date of transfer. But it needs to be to a bona fide stockholder, not an agent or nominee of the true owners just trying to get around the timing requirements. Quote Link to comment Share on other sites More sharing options...
mircpa Posted May 13, 2008 Author Report Share Posted May 13, 2008 This is what i am trying to find out to narrow out my thinking, of course it is a bonafide transaction/stockholder. thanks again Quote Link to comment Share on other sites More sharing options...
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