S - Corp Ninja

Question 1

Shareholders

Answer 1

Only individuals/estates/trusts

100 shareholders max

Question 2

Location

Answer 2

Domestic only/no international S corp

Question 3

S-Corp stock

Answer 3

only one class of stock allowed

Question 4

Election for S corp

Answer 4

must be made by 3/15 and counts as being an S corp since the beginning of the year

100% of shareholders must consent

Question 5

1120s

Answer 5

S-Corp income tax form

Question 6

tax year

Answer 6

Calendary tax year only

Question 7

To terminate S-Corp

Answer 7

50% of shareholders must consent
No S corp election allowed 5 years after termination
Termination effective immediately following an act that terminates status.

Question 8

Foreign Taxes

Answer 8

No Foreign taxes paid deduction allowed - goes on schedule K

Question 9

investment Interest Expense

Answer 9

No investment interest expense allowed - goes on schedule K

Question 10

179 deduction

Answer 10

No 179 deduction allowed

Question 11

1231

Answer 11

No 1231 G/L

Question 12

Charitable Contributions

Answer 12

No charitable contributions

Question 13

Portfolio income

Answer 13

No portfolio income

Question 14

Built in Gains

Answer 14

C-Corps that convert to S-Corps are subject to a tax on the subsequent sale of Corporate Assets

Prevents a C-Corp from avoiding Double-Taxation by converting to an S-Corp

FMV of Assets @ S-Corp Election
-Adjust basis of assets
= Built in Gain x 35% corp tax rate