J. D. formed Clampett, Inc. as a C corporation (calendar tax year) with J. D., Granny, and Jethro, Inc. (a C corporation) as shareholders. On January 15, 2017, Jethro, Inc. sold all its shares to Jane Hathaway. On February 28, 2017, Clampett, Inc. filed an S corporation election, with J. D., Granny, and Jane all consenting to the election. What is the earliest effective date of the S election?

Question

Quizplus · Accepted Answer

The earliest effective date of the S election is January 1, 2018, because the corporation must have been a C corporation for the entire preceding tax year (2017) in order to make the S election for the following tax year (2018).

J D Formed Clampett, Inc