S Corp Converted to an LLC

[taxprep5268]

Client converted S Corp rental to LLC in State of Fl.  The state uses the same EIN going forward from  the S corp to the LLC.  How does the IRS know its now a LLC? I was planning to file a final S Corp, and a new LLC with the same EIN .. how do I report the converted EIN from the S  Corp to the LLC? 

Thanks for your help!!

[IRonMaN]

But you would have had to liquidate the S corp in order to transfer assets to an LLC.  You have two separate entities and therefore would have two separate tax ID numbers --------------------- with some potential tax liability upon liquidation of the S corp.

[abctax55]

One doesn't "convert" a S-Corp to an LLC.

Your client has a dissolution, with the assets distributed (at fair market value) to the shareholder(s) AND any resultant gains reported/taxes paid.

Then the assets (some, or all) are contributed to the LLC, as well as (possibly) any associated liabilities.

Off the top of my head.. but I'm thinking a new FEIN is required (unless it's a SMLLC without payroll).

[IRonMaN]

What took you so long?🤣😂

[RollTide68]

To revoke a Subchapter S election/small business election that was made on Form 2553, submit a statement of revocation to the service center where you file your annual return.

The statement should state:

• The corporation revokes the election made under Section 1362(a)
• Name of the shareholder(s),
• Address of the shareholder(s),
• Taxpayer identification number of the shareholder(s),
• The number of shares of stock owned by the shareholder(s),
• The date (or dates) on which the stock was acquired
• The date on which the shareholder's taxable year ends
• The name of the S corporation
• The S corporation's EIN
• The election to which the shareholder(s) revokes
• The statement must be signed by the shareholder(s) under penalties of perjury
• Signature and consent of shareholder(s) who collectively own more than 50% of the number of issued and outstanding stock of the corporation, (whether voting or non-voting)
• Indication of the effective date of the revocation (or prospective date)
• Signature of person authorized to sign return

Due Date of Revocation:

• If revoking effective the first day of the tax year, the revocation is due by the 16th day of the third month of the tax year,
• If revoking effective any day other than the first day of the tax year, the revocation must be received by IRS by the requested effective date.
  • For example, the S corporation is on a December 31 tax year ending and requests a revocation effective Jan. 1st, the revocation is due March 15th.
  • The S corporation is on a December 31 tax year ending and requests a revocation effective Feb. 14th, the revocation is due Feb. 14th. 

https://www.irs.gov/forms-pubs/revoking-a-subchapter-s-election

[abctax55]

hmmm - musta' been distracted making my coffee?

[abctax55]

Just to clarify tho, revoking S-Corp status makes you a C-Corp, not an LLC which is what the OP suggests his/her client wants.

[RollTide68]

Sorry should have clarified my intent with that post.

If the S-Corp was actually an LLC that submitted a 2553 to be taxed as an S-Corp may make a revocation election and convert back to an LLC