Question

Bill and Bob are forming B&B ROACH COACH BURGERS, INC. and want to make a valid S-Corp election. While waiting for their attorney to file the articles of incorporation, Bill and Bob purchase a used 2015 Catering truck in the name of B&B ROACH COACH BURGERS, INC. and that weekend they cater a pool party in Camarillo for $1,000. A few days later, their attorney calls to let them know the California Secretary of State has Certified their articles of incorporation as filed the previous day. B&B has elected a calendar year as its business year. The dates of the above events are as follows: Truck purchase June 29, 2017 Pool Party July 4, 2017 Articles filed July 7, 2017 a. What is the general rule on the deadline for filing an S-Corporation election? b. When does the election period begin for a new corporation? c. Which of the above actions, if any, triggered the running of the election period? d. What is the filing deadline for B&B if they want the S-Corp election to be effective for 2017? e. Carl Smith, Bob and Bill's CPA (and brother-in-law) files the S-Corporation election on October 1, 2017. What impact will this have on B&B's Status as an S Corp for 2017 and 2018?

Answer 1

a. As per General Rule, One needs to File Form 2553 for S-Corp election within 2 Months and 15 Days from the beginning of Corporation’s Tax year.

b. The Election period begins on the Day of the month ,the tax year begins for the New Corporation.

c. All the 3 events indicate the running of the election period.

d. B & B has to file the Form 2553 to be eligible for S Corp Election latest by September 12,2017 [June 29 to August 28 and 15 more days so September 12,2017].