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My client's company is a Corp. He is filing form 2553 to become

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My client's company is a...
My client's company is a Corp. He is filing form 2553 to become an S-Corp,and they ask how many shares have been issued and his response is that he has not issued any stock. But the state and IRS does not accept that. I said that when he became a C-Corp he was issued stock. He said that it was not issued. I said when you become a C-Corp you are automatically issued stock. He says that he has not issued any. What is the answer for how many shares were issued on form 2553?
Submitted: 1 year ago.Category: Tax
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4/1/2016
Tax Professional: Lev, Tax Advisor replied 1 year ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,162
Experience: Taxes, Immigration, Labor Relations
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When the corporation was created or the tax treatment was selected as a corporation - whether that C-corporation or S-corporation - there are must be shares - so you are correct.
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Tax Professional: Lev, Tax Advisor replied 1 year ago
In some situations - when corporations are register - the number of shares are not explicitly mentioned - but instead shareholder ownership is identified as a percentage of total ownership.In this case - we may assume that corporation has 100 shares.In your case - when there is only ONE shareholder - you still may identify 100 shares - or you may state ONE share that identifies the ownership.That will be accepted by the IRS and will not create any issues with tax filing..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.
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Lev
Lev, Tax Advisor
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