The Conduit Concept For most tax matters S corporations are treated like

The conduit concept for most tax matters s

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  CCH Federal Taxation Comprehensive Topics 8 of 63 Chapter 21, Exhibit 2a
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CCH Federal Taxation Comprehensive Topics 9 of 63 Chapter 21, Exhibit 2b
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CCH Federal Taxation Comprehensive Topics 10 of 63 Chapter 21, Exhibit 2c
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Nontax Matters.  For most structural matters (e.g., formation,   redemptions and terminations), S corporations are treated in  much the same manner as C corporations. CCH Federal Taxation Comprehensive Topics 11 of 63 Chapter 21, Exhibit 2d
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A corporation is treated as an S corporation only for those days for which each specific eligibility requirement is met and the required election is effective. Eligibility and election rules include:Unanimous Consent.  100% of the shareholders must consent to the S election.Deadline For Filing S Election. If a calendar year C corporation makes an S election by 3/15/x1, it is retroactive to 1/1/x1.  If made after 3/15/x1, but before 3/15/x2, it is effective 1/1/x2.     CCH Federal Taxation Comprehensive Topics 12 of 63 Chapter 21, Exhibit 3a
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One Class of Stock.  Only one class of stock is permitted. Rights to profits and assets on liquidation must be identical. Debt may be treated as a disqualifying second class of stock.   Maximum 100 Shareholders.  The number of shareholders may  not exceed 100. A nonresident alien may not own shares. Each shareholder must be an individual, an estate, or a qualified trust. Related taxpayers count as one taxpayer. CCH Federal Taxation Comprehensive Topics 13 of 63 Chapter 21, Exhibit 3b
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Ineligible Corporations.  The corporation must be domestic  but not a bank or insurance company. Eligible Subsidiaries. S corporations can own C corporations, but C corporations cannot  own S corporations. S corporations can own qualified subchapter S subsidiaries  (QSub). A QSub is an electing domestic corporation that qualifies 
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  • Spring '10
  • seda
  • Accounting, Taxes, C CORPORATION, CCH Federal Taxation, Federal Taxation Comprehensive Topics

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