What is S corporation late election relief?
In short
An S election must generally be filed within 2 months and 15 days after the start of the tax year it is to take effect. Simplified relief allows a late election within 3 years and 75 days of the intended date if there was reasonable cause.
Key takeaways
- All shareholders must have reported consistently with S corporation status.
- The late election is filed on Form 2553 with a statement of reasonable cause.
- Outside the simplified relief, a private letter ruling is needed.
Where it's tested
TCP: S Corporation Compliance & Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An S corporation shareholder wants to deduct a $50,000 loss but has only $20,000 of stock basis. Which action would create additional basis to absorb the loss?