Question

why is the election for s corporation status attractive

Answer 1

Election for S corporation is attractive because after election a corporations gains many benefits.

After election all the income of an S corporation is not subject to corporate tax instead all the income pass through the shareholders. Shareholders show this income in their individual income tax returns only. This also reduces the burden of Double taxation which can be seen in a regular corporation.

Ownership transfer becomes very easy in S Corporation.

Benefit of a Corporate business like Limited liability is available in S corporation. Its better to go for S corporation instead of a partnership firm. The personal assets of members are saved in S corporation.

Not to mention the fact that S corporation is done when business is small so that small businesses can also have advantages of a corporate business and still have privileges allowed to small businesses.