Q:

Dear Mr Kerstetter,

                  if I change from an S corp to a C corp and also change from fiscal to calendar tax returns, is there a time period that I have to wait till I can  exercise all the benifets of a C corp,

                  sincerely, and thanks,

A:

There are far too many variables involved with a conversion from an S to C corp for me to be able to give any advice.  You need to work with a professional tax advisor who can help you accommodate your special circumstances.

For clarification, S corps are only allowed to use calendar tax years, ending December 31; while C corps can end their years at the end of any month.  As I have mentioned on my website, after converting from an S to a C, IRS will not allow you to change the tax year because they know how easy it is to reduce taxes with a non-December fiscal year.

What I have found on several occasions working with clients who had first considered converting from S to C, was that it turned out to be a whole lot easier to just set up a brand new C corp, where we didn't have any of the restrictions that a conversion requires.  That could very well be what your personal tax advisor will recommend for your satiation.

I hope this helps.  Good luck.

Kerry Kerstetter

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 7/04/2005 04:00:00 PM Send this post: