Tax Law (Questions About Taxes)/1120 S

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Question
Can an 1120S revoke it's election from being an 1120 S to a full 1120 (corporation) while it is going thru bankrupty YES or NO.

If it can dose that protect the 1120 S sharholders from future and past IRS judgements by throwing it all on the full corporation.

I know the election has to be made  before 3/15 of the current year.

Answer
In a word, no.

No you can't "protect the 1120 S sharholders from future and past IRS judgements by throwing it all on the full corporation" because the tax liability happened in the past and we can't erase the past.

Could you petition the bankruptcy judge to allow the change at the anniversary? Yes, and if you can give good reason, other than WE don't want the stockholders to pay the IRS, he might agree. But again that doesn't change history. That would only change the 2015 tax year issues.

There are tactics and solutions that might be available outside of the bankrupt business to help the individuals, but I don't have enough information to give you any starting points.

Call me.  

Tax Law (Questions About Taxes)

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Richard Fritzler

Expertise

Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.

Experience

I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

Organizations
National Small Business Owners Association.
Publications
Contributing author to "The Corporate Standard Newsletter".


Publications
Contributing author to "The Corporate Standard Newsletter".
Ezinearticles.com articlesbase.com

Education/Credentials
I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

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