S Corporation Tenninations. Which of the following events
will cause termination or revocation of the S election for a calendar year
corporation? When is the termination or revocation effective? (Assume all ocher
requirements for an Selection are met and chat any termination is not
inadvertent. )
a. Best Corporation has 100 qualifying S corporation shareho
lders. Sam dies on October 13, and the estate holds his stock for the rest of
the year.
b. Assume the same facts as in Part a except the estate
distributes the stock ro Sam’s child before the end of the tax year. Sam’s
child did not previously own any Best stock.
c. Best issues nonvoting common stock to Susan’s two
children during the current year. Susan’s children did nor previously own any
Best stock.
d. Shareholders Susan, Ted, and Tim, who own 60% of the Best
stock, file the necessary form on October 1 ro revoke the election as of chis
date. All three shareholders are calendar year taxpayers.
Leave a Reply