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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4091
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I was a LLC that elected to be taxed as a S-corp (5 shareholders).

Customer Question

I was a LLC that elected to be taxed as a S-corp (5 shareholders). On 4/1/15 the 5 shareholders transferred all their shares into a holding company (c corp) so that now the holding company holds all the shares of the s-corp. I understand this terminates the s-corp election. My question is: (1) when the termination occurs, does this change the company into a C-corp or back to a LLC? and (2) if it is now a c-corp, does this mean I have a parent-subsidiary situation now and do I file a consolidated tax return for the 2 companies?
Submitted: 6 months ago.
Category: Tax
Expert:  PDtax replied 6 months ago.
Hi from just answer. I'mCustomer
Expert:  PDtax replied 6 months ago.
1. Your terminated S reverts to an LLC. You could elect C status after filing the final S return for the short period. 2. It is now an LLC. You can elect for it to be treated as a C, and file a parent-sub consolidated return. Thanks for asking at Just Answer. Positive feedback is appreciated. I'mCustomer

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