Helmut and Sergei own all the stock of Zappo Corporation, a calendar- year domestic corporation. On January 30 of the current year, Sergei sells his entire interest in the Zappo stock to Nils. All three individuals are U.S. citizens. Can an S election be made for the current year?

Question

Quizplus · Accepted Answer

An S election requires the consent of all shareholders who owned stock at any time during the tax year. Since Sergei owned stock at the beginning of the year, his consent is necessary for the S election to be valid for the current year.

Helmut and Sergei Own All the Stock of Zappo Corporation