Short or Fiscal Tax Year

[rfk]

Question:

Client inc'd (C) on 12/29/03 from a sole prop position; never filed taxes; is in suspension according to CA state records. He wants to file his taxes now to "wake up" his company.

What tax situation is he in since he inc'd so late in the year? Can / should he do the sole prop situation. And, can he chose to use a fiscal year of his choice via the natural tax year?

Please share your thoughts.

Thank you.

Ray

[Bees Knees]

A C corp can choose a fiscal year. The first year could be a short calendar year from 12/29/03 to 12/31/03, or could be a fiscal year ending in any month not more than 12 months later than 12/29/03.

The tax situation he is in is he has a bunch of late tax returns to file. Depending upon the penalties involved, the fewer returns to file due to the fiscal year you choose may be something to consider.