If Annie and Andy (each a 30% shareholder in a calendar year S corporation) file a revocation statement on February 10, 2018 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, 2018.
B) February 10, 2018.
C) January 1, 2019.
D) February 10, 2019.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

Because more than 50% of the shareholders make a valid S termination election before 2½ months of the current year, the election is valid as of the beginning of the year.

If Annie and Andy (Each a 30% Shareholder in a Calendar