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S corporations: qualifying, electing and terminating

SEE 2 Chapter 9 · IRS outline 1E1, 1E2, 1E3, 1E6

Daniel Okafor wants the liability shield of a corporation, without the double tax. Nadia says S status could fit, but it's a fragile thing. Give one share to the wrong person, sign a side deal on distributions, or miss one date by a day, and it's gone. Theo reads the file, and notices a Canadian cousin who has an option on some shares. Nadia smiles. This is how Theo learns what can quietly destroy an S corporation.

In this chapter

1. Requirements: who can be an S corporation
2. The election: Form 2553
3. Revocation and termination
4. Inadvertent termination, reinstatement and transitions
5. Taxes an S corporation can owe, and who should elect

This chapter has 5 lessons and 50 practice MCQs with explanations, plus flashcards and a recall sheet.

What this chapter covers

• Shareholder and stock rules
• Form 2553 and late relief
• revocation and termination
• inadvertent termination relief
• built-in gains and passive income taxes

Chapter 8: Earnings, dividends, redemptions and liquidations · Chapter 10: S corporations: income, basis and distributions