Suppose a calendar year C corporation,NewCorp.,Inc.,was formed on January 1,2017 and all of the shareholders filed a form 2553 to elect S corporation status on April 14,2017 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?

Question

Quizplus · Accepted Answer

A C corporation cannot have another C corporation as a shareholder and still qualify for S corporation status. Therefore, the S election is never effective.

Suppose a Calendar Year C Corporation,NewCorp