Do you operate your business as a C corporation?
Would you like to turn it into an S corporation?
If the answer is “yes,” be very careful! You see the IRS’s “built-in-gains” tax keeps a C corporation from wriggling out of double taxation by switching to an S corporation and then instantly selling or liquidating all its assets.
If you want to stay in Uncle Sam’s good books and make the transition to S corporation status as smooth as possible, read my new article titled Tax Tips: S Corporation Tax on Built-In Gains Is Trouble.
Three ways our fact-filled article can help you:
- We’ll tell you how the built-in-gains tax works. Lawmakers wanted to make sure you didn’t skip paying taxes so they enacted the harsh built-in-tax. It was designed to impact S corporations that sell assets they once owned while operating as a C corporation. We’ll make everything clear when you read the full article.
- You’ll learn why you should get an appraisal pronto. If you’re going to make the switch to an S corporation, the first thing you need to do is get an appraisal. Why? Because appreciation that takes place after the conversion is not subject to the built-in gains tax! You’ll get the whole story when you read the full article.
- We’ll explain why smart planning is so important. To put it simply… if you want to reduce your built-in-gains taxes, sell your built-in-loss property to offset your built-in gain property. And make sure you do this in the same taxable year! You’ll get all the details when you read the full article.