If Annie and Andy (each a 30 percent shareholder in a calendar-year S corporation)file a revocation statement on February 10, 2019, to terminate their S corporation's S election, what is the effective date of the S corporation termination (assuming they do not specify one)?
A)January 1, 2019.
B)February 10, 2019.
C)January 1, 2020.
D)February 10, 2020.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The effective date of an S corporation termination is the day before the first day of the tax year if the revocation statement is filed on or before that date. In this case, since the revocation statement was filed on February 10, 2019, the termination would be effective on January 1, 2019 (the day before the first day of the 2019 tax year).

If Annie and Andy (Each a 30 Percent Shareholder in a Calendar-Year