Debbie, have you thought through the implications of liquidating the corporation? If there are any appreciated assets, even after ceasing operations, be mindful of Section 311(b). Even when filing Form 8832 to change tax classification, the deemed tax consequences still apply.
Regarding the Form itself, if you look to the instructions, the only limit on electing back out of Sub S and getting taxed as a DRE is the 60-month rule.
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Matthew E. Rappaport, Esq., LL.M.
Vice Managing Partner
Chair, Taxation Group
Falcon, Rappaport & Berkman PLLC
(516) 558-3377
mer@frblaw.com------------------------------
Original Message:
Sent: 03-05-2021 03:32 PM
From: Debbie Zelen
Subject: LLC revoke S Election. return to SMLLC
S corp ended operations in 2020 and is filing final 1120S. Owner wants to retain LLC and go back to SMLLC disregarded entity status. Is the timely filing form 8832 sufficient to accomplish this or is some other action necessary?
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Deborah J. Zelen, CPA
Melville, NY 11747
917-923-5331
debbie@djzcpa.com
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