Go to Jeff Salisbury LWGate Home Page.From: "Rao, Bharat" <bharat@scr.siemens.com>
Subject: Electing Subchapter-S after March 15 for a *NEW* corporation
Date: Fri, 23 Apr 1999 13:35:10 -0400
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I'm not sure if this is the correct list to ask this question, (if not apologies0 but even my accountant is not giving me a straight answer. If anyone has any experience with this specific question or any pointers, I'd greatly appreciate it. I have been researching this for a while, with books, accountants, and calls to the IRS, but to no avail; at least with a 100% definite answer. The language in electing subchapter S says that "[the corporation] must elect to file for subchapter S, within 2 and 1/2 months of its calendar tax year ..." for the election to be valid for that year. This means, for a calendar year corporation, that is by March 15. I plan to set up a calender year corporation, but it does not exist now -- i.e., I will set it up, and it will normally have a calender tax year (1/1 to 12/31). It is really important (for tax reasons) that this be a S corp. However, if I create my corporation on May 1, does this mean I have until July 15 to file form 2553 (election for S-corp), or does this mean I'm out of luck for 1999. If that is the case, I'd prefer to wait until Jan 2000 to start my company, because of the nightmarish regulations in converting a C-corp to an S-corp.... Boy, I wish the IRS documentation would be specific on this issue, as would any of the 5 (I kid you not) books I have bought about setting up corporations -- all of them give examples about how you must file by 3/15, and in the one case where one considers a corporation that started June 1, well guess what, they elected a tax year (with a justification that satisfies the IRS) that runs from June to June.. sigh... After blowing another $300 in accountant and legal consulting fees, I'm nowhere clear to a definitive answer.... sigh, wish the IRS was clearer, but I may as well wish for the rain to stop right now -- probably have a better chance for the latter:-) Thanks for anyone who has been through this personally, Bharat R. Bharat Rao E-mail:bharat@scr.siemens.com Adaptive Information & Signal Processing, Siemens Corporate Research US Mail: 755 College Road East, Princeton, NJ 08540 Phones: (609)734-6531(O) (609)734-6565(F) - -
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