On March 15, 2020, J.D. sold his Clampett, Incorporated (an S corporation)shares to Ellie Mae, Incorporated (a C corporation), terminating Clampett, Incorporated's S election on March 15, 2020. Absent permission from the IRS, what is the earliest date Clampett, Incorporated, may again elect to be taxed as an S corporation?

Question

Quizplus · Accepted Answer

When an S corporation revokes its S election or has it terminated, it cannot make a new S election for five years unless the IRS provides permission for an earlier election. Therefore, the earliest date Clampett, Incorporated could elect to be taxed as an S corporation again is January 1, 2025.