T. Christopher D’Avico, Lauren Pope Stalls, and Ed Decker have published their article, Converting from S corp. to C corp.: Select issues for consideration in the AICPA Tax Advisor. Their article begins as follows:
The recent passage of comprehensive federal tax reform (see the law formerly titled the Tax Cuts and Jobs Act of 2017, P.L. 115-97) has taxpayers of all types evaluating the impact of the new rules on their current tax positions. For example, S corporations may be considering whether it may be more advantageous to be taxed as a C corporation, despite the double taxation of C corporation dividend distributions. S corporations that perform this analysis and conclude that it may be more advantageous to be taxed as a C corporation should consider, among others, the following issues.
The article proceeds to address the following topics:
- revoking an s election
- income allocations for midyear revocations
- tax accounting considerations
- distributions following a revocation
- requirement that “money” be distributed
- suspended shareholder losses at the time of revocation
- closing thoughts
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.