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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I incorporated my business in WA State in 2010. I cant see

Resolved Question:

I incorporated my business in WA State in 2010. I can't see where I elected to be an S Corp or a C Corp, it doesn't show it anywhere in my paperwork and I can't remember. I'm filing late for 2012 (I know this will cost me but it is what it is) which is the first year that I had any revenue to account for.

At the time when I filed the Application for Profit Corporation I listed my then business partner as Incorporater #2. We have since dissolved our relationship and I would prefer to be personally responsible for the business's taxes and not have it affect her. Is there any way to back-track and make the business a Sole Proprietorship and file taxes in that manner?

I plan to hire a CPA and am just in the process of finding and organizing my paperwork but I'm just wondering if there's anyway to leave a fellow Incorporater off the business taxes, remove her name, etc. or is she going to be stuck. Her name is XXXXX XXXXX any of the bank accounts or anything else, just that initial filing. Thank you for your time.
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

If you are a corporation, and never filed an election to be treated as an S Corp then you are by default a C Corp.

Megan C :

You would have filed form 2553 with the IRS to make the election to be an S Corp

Megan C :

Also, you cannot back track and make this a sole proprietorship. You could dissolve the corporation and start a new business, but you can't change the form of this business.

Megan C :

In terms of the other shareholder. All they would need to do is gift you their interest in the business.

Customer:

Is there a specific form for that?

Megan C :

No, there's no specific form for that, you would just document in your corporate minutes.

Customer:

So would the 'date of the minutes' matter? Say, if I draft something and have her sign it and it's dated 2013 but I'm filing taxes for 2012 as a corporation and leaving her off of them would that be okay?

Customer:

One last questions. I'm thinking the answer is 'no', but is it possible to dissolve the C Corp, re-incorporate as a Sole Propreitor and file taxes for 2012 as a Sole Proprietor?

Megan C :

Thank you for your follow up question. The date of the minutes would matter. If she was part owner for 2012 she would be stuck. However, if it's a C Corp she will have no personal tax liability from this.

Megan C :

And no, there's no way to retroactively become a sole proprietor

Customer:

Okay, thank you.

Megan C :

You're welcome

Megan C :

Is there anything else I can assist you with today?

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 3 other Tax Specialists are ready to help you
Expert:  Megan C replied 1 year ago.
Thanks, Lynn for your positive rating. Please come back and visit me any time you have a question that needs answered. It was a pleasure working with you today. In the future you can request me directly. I look forward to hearing from you again.

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Megan C
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Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level