LLC taxed as S corp

[Greenbriar]

When an LLC elects to be taxed as an S corp, does that mean they have to issue shares of stock, keep minutes of meetings, elect a board of directors, etc. and essentially conduct business as a C corp that elects S corp status? Thanks.

[dsi]

When an LLC elects to be taxed as an S corp, does that mean they have to issue shares of stock, keep minutes of meetings, elect a board of directors, etc. and essentially conduct business as a C corp that elects S corp status? Thanks.

No stock issued. Remember, this is still an LLC. It is ONLY taxed as if it were an S-corp.
I don't know about your other questions.

[Greenbriar]

Chart of accounts

David,
I guess my confusion is which coa to use. If taxed as an S corp, then the coa is required for the 1120S which includes capital stock whereas a single member llc is a schedule C. withdrawals are charged to owner's draw account but if taxed as an S corp, are they charged to shareholder loan, dividend, salary??? Thanks.

[JoshinNC]

It's still an LLC

David,
I guess my confusion is which coa to use. If taxed as an S corp, then the coa is required for the 1120S which includes capital stock whereas a single member llc is a schedule C. withdrawals are charged to owner's draw account but if taxed as an S corp, are they charged to shareholder loan, dividend, salary??? Thanks.

you just get the attributes of S corp taxation

Draws would be dividends, but you must also have the member take a salary to satisfy IRS requirements (although the amount of salary to be taken would start a huge argument on this board).

[WhiteOleander]

you just get the attributes of S corp taxation

Draws would be dividends, but you must also have the member take a salary to satisfy IRS requirements (although the amount of salary to be taken would start a huge argument on this board).

Disagree, Draws are not Dividends from a S-Corp. They are distributions up to the total basis for the S/H-Member. After that, draws are taxed as capital gains.

That's my understanding.

[JoshinNC]

Well Duh!

Disagree, Draws are not Dividends from a S-Corp. They are distributions up to the total basis for the S/H-Member. After that, draws are taxed as capital gains.

That's my understanding.

I didn't think I needed to put that in there, but I forgot that we sometimes are talking to people who see tax preparation as a hobby instead of a profession.

So yes, draws in excess of basis would be capital gains to the shareholders. But they would still be dividends on the books, unless you want to create a seperate account called "Draws that are really dividends but get taxed as capital gains". Somehow I don't think that will fit on the balance sheet though.

[WhiteOleander]

Are you referring to me?

" didn't think I needed to put that in there, but I forgot that we sometimes are talking to people who see tax preparation as a hobby instead of a profession."