NASSAUSUFFOLK

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  • 1.  Revocation of "S" status for a LLC

    Bronze Most Valuable Member
    Posted 02-27-2014 12:21 PM
    This message has been cross posted to the following Discussions: TAX COMMITTEE and NASSAUSUFFOLK .
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    I have a new client. The prior accountant was a college student.

    The client is a single member LLC. On the advice of the college student the client elected to be treated as an "S" corp.

    I know how to revoke an election made by a corporation.  How do I revoke an election made my a LLC ?

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    Sheldon Kronowitz
    SHELDON H KRONOWITZ CPA PC
    Levittown NY
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  • 2.  RE:Revocation of "S" status for a LLC

    Platinum Most Valuable Member
    Posted 02-28-2014 06:23 AM
    Shelly: If you terminate the election, isn't the LLC then taxed as a C Corp? Robert

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    Robert Brown
    ROBERT N. BROWN, CPA
    Jericho NY

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  • 3.  RE:Revocation of "S" status for a LLC

    Silver Most Valuable Member
    Posted 02-28-2014 08:14 AM
    Be careful. Converting from corporation back to LLC/as disregarded entity could be a taxable event. It is deemed a liquidation of the S corporation subject to the tax consequences of a liquidation. Could be a problem if there are appreciated assets, including goodwill or hot assets such as inventory or AR. I believe you still use 8832 Form. I saw  reference for Reg 301.7701-3(g) but did not look at.

    Good luck.

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    Robert Sick
    ROBERT SICK, CPA PLLC
    Patchogue NY
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