If Annie and Andy (each a 30 percent shareholder in a calendar-year S corporation) file a revocation statement on March 20, 2019, to terminate their S corporation's S election, what is the effective date of the S corporation termination (assuming they do not specify one) ?

Question

Camron Bond

Business

20 June, 03:01

If Annie and Andy (each a 30 percent shareholder in a calendar-year S corporation) file a revocation statement on March 20, 2019, to terminate their S corporation's S election, what is the effective date of the S corporation termination (assuming they do not specify one) ?

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Answers (1)

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Heath Carey · Answer 1

January 1, 2020

Explanation:

An S corporation isalso called small business corporation. It is a type of company that shields its owners in the case of liabilities. The owners are not directly liable for obligations of the corporation.

A calenders year of a company is defined as the fiscal year in which a company makes profit and declares a profit or loss within that time frame.

If shareholders file a revocation statement on March 20, 2019, to terminate their S corporation's S election, they will have to wait till the end of the fiscal year before the S corporation is terminated.

That is on January 1, 2020.