Changing from C-Corp to an S-Corp

[gmdoane]

My Michigan based company is changing from a C-Corp to an S-Corp at the beginning of 2014. It was an S-Corp many years ago but it has been a C-Corp for over ten years now. Other than filing Form 2553 and watching for built-in gains tax on assets sold within five years, is there anything else I need to do, be aware of, or watch out for?

[mactoolsix]

Does the C corp have any NOLs that could be lost upon conversion to an S?

Inventories valued on LIFO will be taxed on the LIFO benefits.

[gmdoane]

NOL losses and Inventory

Does the C corp have any NOLs that could be lost upon conversion to an S?

Inventories valued on LIFO will be taxed on the LIFO benefits.

Thanks for the reply. The corporation had NOLs prior to 2011 but they have all been used. It is a financial services corp and does not carry an inventory.

[veritas]

accounting method

Is the corp cash basis? Income earned priot to the conversion could be subject to built in gains tax.

[gmdoane]

C-Corp to an S-Corp

Is the corp cash basis? Income earned priot to the conversion could be subject to built in gains tax.

Other than gains on assets and the possible built in gains on those what kind of built in gains tax would there be on earned income prior to the conversion? The S-election will be for the full 2014 tax year and prior to that it has been taxed as a C-Corp.