Re: S corp converted to a C corp mid year tax filings

Lauracurtinross · ‎11-05-2021

I have a client that converted their calendar year S corp to a C corp mid year and I cannot find a definitive answer as to how to file the return. Since the revocation was not made until September, do they file S corp for the whole year? Do they file two tax returns one for the S and one for the C? Does anyone know? I have found answers that say both.

Laura

sjrcpa · ‎11-05-2021

Two short year returns. One S Corp up until S election terminated. Then C Corp for rest of year.

The more I know the more I don’t know.

View solution in original post

eric1032 · ‎11-05-2021

i have done this several time.

yes file two returns. one for S-corp from beginning of year to when the revocation occured and one for C-corp from start of C-corp to end of tax year.

remember corp return is due 75 days after period end...so watch out for your s-corp deadline.

Lauracurtinross · ‎11-05-2021

This is what I thought too, two tax returns. I did some research and both ways were mentioned. If I file two tax returns they are both late with penalties.

sjrcpa · ‎11-05-2021

There is no authority for filing one S Corp return for the calendar year.

Yes both returns are late.

The more I know the more I don’t know.

BobKamman · ‎11-05-2021

Spoiler

"The IRS does not offer a standard form for changing your company’s tax status from S corporation to C corporation. Instead, it simply requires a written statement be filed with the appropriate IRS service center, along with a consent signed by a majority (more than 50%) of your corporation’s shareholders .

The written statement can specify a date as long as it is not prior to the filing of the actual tax status reversal. If no specific date is listed, the filing becomes effective during the current tax year as long as the revocation is filed by the fifteenth (15th) day of the third month of the current tax year. If it is filed after that date, it becomes effective as of the first day of the following tax year."

At least that's what they say here.

https://www.delawareinc.com/blog/why-convert-your-tax-status-from-s-corp-to-c-corp/

I would think it might depend on whether the change was voluntary or mandatory; when it was requested; and whether the request for the change specified a date.

"The IRS does not offer a standard form for changing your company’s tax status from S corporation to C corporation. Instead, it simply requires a written statement be filed with the appropriate IRS service center, along with a consent signed by a majority (more than 50%) of your corporation’s shareholders .The written statement can specify a date as long as it is not prior to the filing of the actual tax status reversal. If no specific date is listed, the filing becomes effective during the current tax year as long as the revocation is filed by the fifteenth (15th) day of the third month of the current tax year. If it is filed after that date, it becomes effective as of the first day of the following tax year."At least that's what they say here.https://www.delawareinc.com/blog/why-convert-your-tax-status-from-s-corp-to-c-corp/I would think it might depend on whether the change was voluntary or mandatory; when it was requested; and whether the request for the change specified a date.

Lauracurtinross · ‎11-07-2021

Thank you. I like this answer better. Less penalties.

Laura