Suppose a calendar year C corporation, NewCorp., Inc., was formed on January 1, 2018 and all of the shareholders filed a form 2553 to elect S corporation status on April 14, 2018 with the consent of all of NewCorp. Inc.'s shareholders: Hassell, Richie Cunningham, and Arnold's, Inc. (a C corporation). When is the S election effective?
A) January 1, 2018.
B) April 14, 2018.
C) January 1, 2019.
D) April 14, 2019.
E) Never.

Question

Quizplus · Accepted Answer

The election is not valid because S corporations cannot have corporations as shareholders (Arnold's, Inc.).

Suppose a Calendar Year C Corporation, NewCorp