I have a client that was a C-Corp and it was sold. The new owner made an S election mid year starting with the date they bought it. Do we file a short year C corp return up to the date of the ownership transfer and then an S Corp return for the remainder of the year?
It's saying you can't create a short C year by electing S status mid year. The election can only be effective at the beginning of the fiscal year (the day after the natural end of C the year)
Just to make it more complicated. The IRS has not confirmed the S election yet. We have not heard back. Also the C Corporation was a March 31 year end.
It sounds like the S election will be effective starting April 1 of the year?
Perhaps 4/1/22 or maybe 4/1/23. You can still file the 1120-S effective 4/1/22 and deal with late election issues if you ever get a notice. Or send another 2553 with the 4/1/22-12/31/22 1120-S.