The Tax Cuts and Jobs Act (TCJA) may get you thinking about whether it makes sense to change your form of business entity.
Maybe you’re considering turning your S corporation into a C corporation, partnership, or sole proprietorship.
If you’re currently running a C corporation, you’ll have to terminate it and elect to switch to another form of business entity.
- How do you go about terminating your S corporation correctly?
- What are the tax consequences of making the change?
We’ll answer both questions and provide you with a lot more valuable information when you read my new article titled TCJA Planning: Terminating Your S Corporation Election.
Three ways our fact-filled article can help you:
- We’ll tell you the first steps you need to take. If you want to turn your S corporation into a C corporation, you’ll have to file an S corporation election-revocation statement with the IRS. Your corporation is then considered a C corporation for federal tax purposes. (If you don’t want your business to be either an S or C corporation, you can liquidate the S corporation and contribute the assets to a new business entity.) You’ll get all the details when you read the full article.
- You’ll learn how to handle things if you’re an LLC. Things can get a bit more complicated. First, you file the S corporation election-revocation statement with the IRS. The tax law then treats your LLC as a C corporation for federal tax purposes. If you want a disregarded entity (single-member LLC) or partnership (multi-member LLC), you’ll also need to file another form to revoke the C corporation election. All will be explained when you read the full article.
- We’ll also explain other vitally important issues. We’ll cover revocation timelines, the revocation process, “deemed revocation,” revocation consequences, and more. You’ll get a clear explanation of all these important issues when you read the full article.