If Annie and Andy (each a 30% shareholder in a calendar year S corporation) file a revocation statement on March 20, 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) March 18, 2018.
C) January 1, 2019.
D) March 16, 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 after 2½ months of the current year, the election is valid as of the beginning of the next year.

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