Converting to S Corp.. How far back can you go?

[Hamacher]

I have a client that set up a Corporation in 2004. He contributed land with a value of $200,000 basis of $22,000 in 2004. He sold a piece of the land this year. Upon review of his paper work he realized that he never filed his Form 2553. Is there any way to back date the election? He has not been filing returns for the company because, until this year, it had not generated any income or expenses. I've dealt with Rev. Proc. 2003-43 but I an uncertain if it would apply in this situation. We would prefer to backdate the election to 1/1/04 (which was his original intent).

Thanks in advance.

[Brad Imsdahl]

TTB page 19-4 under "Relief for Late S Elections" has every possible method for getting a late S election through. If none of the Rev. Proc. methods work for you, your last resort is a Private letter ruling, discussed on page 19-5, which can be expensive.

[ChEAr$]

One question, though

[QUOTE=Hamacher;27284]I have a client that set up a Corporation in 2004. He contributed land with a value of $200,000 basis of $22,000 in 2004. He sold a piece of the land this year. Upon review of his paper work he realized that he never filed his Form 2553. Is there any way to back date the election? He has not been filing returns for the company because, until this year, it had not generated any income or expenses. I've dealt with Rev. Proc. 2003-43 but I an uncertain if it would apply in this situation. We would prefer to backdate the election to 1/1/04 (which was his original intent).

This land that he "contributed" to the corporation. How was that handled? As part of
capital (either common stock or premium on common stock?)
And, mostly importantly, was the land actually transferred TO the corporation and
retitled as such?

This just may affect your thinking on this issue.

ChEAr$,
Harlan Lunsford, EA n LA

[Hamacher]

Yes

It was contributed and retitled into the Corporations name.

Anyone else? I have not received my new Tax Book yet.