Hi, all
I own 50% of a C corporation which has been established a few years and does taxes on a cash basis. I'd like to convert to an S corporation for 2011 (I know it's past the deadline - I'll late-file the election). Here are the pertinent details:
- Retained earnings as of Dec 31 2010 will be somewhere near zero
- We own no real property
- Accounts receivable as of Dec 31 2010 are around $170,000
- Accounts receivable at the end of 2011 should be around $150,000
We meet all the requirements to convert to an S corp. The one thing I've not been able to wrap my mind around is the built-in gains tax and accounts receivable. Anyone care to explain to me how this will work in my case?
I own 50% of a C corporation which has been established a few years and does taxes on a cash basis. I'd like to convert to an S corporation for 2011 (I know it's past the deadline - I'll late-file the election). Here are the pertinent details:
- Retained earnings as of Dec 31 2010 will be somewhere near zero
- We own no real property
- Accounts receivable as of Dec 31 2010 are around $170,000
- Accounts receivable at the end of 2011 should be around $150,000
We meet all the requirements to convert to an S corp. The one thing I've not been able to wrap my mind around is the built-in gains tax and accounts receivable. Anyone care to explain to me how this will work in my case?