Ithi Joshi, of Dunlap Bennett & Ludwig PLLC, has made available for download her article, Does my Company Lose its S-Corp Election if a Shareholder Dies?, published in JDSUPRA. The abstract is as follows:
S-Corp tax treatment continues to be a popular choice for many business corporations as they seek favorable tax treatment of business income. The S-Corp status helps a corporation lessen its tax consequences by having income taxed at the individual, shareholder level instead of at higher corporate rates. Corporations with S-Corp status avoid double taxation as well as the payment of tax on the sale or liquidation of business assets. Like a partnership, an S-Corp reports its profits and losses on an individual tax return, but unlike a partnership, an S-Corp is a distinct, standalone legal entity that can survive the death of its shareholders. Subject to qualification requirements, LLCs can elect S-Corp tax treatment as well. For completeness, LLCs can elect partnership or C-Corp tax treatment too.
Posted by David Brito, Managing Associate Editor, Wealth Strategies Journal.