Chapter S, Back to a C - Posted by Jonathan Rexford

Posted by Jonathan Rexford on December 11, 2000 at 13:59:05:

Matt,

I am doing for this several reasons. A portion of my business is Construction. As chapter S I cannot carry losses from one year to the next. Another is I have a daughter that is going to college in a few years. With current income that I make she will be booted out of numerous of scholarships that she will qualify for. I do not mind paying for college but getting a scholarship is a good thing on the resume. I have bought 2 businesses this year. One restaurant and took over a paint and body shop this month (the loan and business and all). My income from 1999 was greatly increased from 1998. My business income from 2000 has tripled from 1999. I am trying to set the business entities according to there risk. All these businesses are consider High Risk in there own right. I am currently holding my speculation real estate in my Construction Corporation. I have set up the restaurant as a regular C Corp. I have a Mortgage Brokerage Business That I am going to get set up as a direct lender early next year. I am trying to harness the FHA/VA loans out their. In January I have two seasoned Mortgage Brokers coming to work for me. I am on track to build 40-50 homes next year. That may not be a lot but for my little company it?s a lot. I have spent the last 6 months putting a team together to run and manage certain areas of the businesses. I hope this answer?s some of your questions. Thanks for asking.

Jonathan Rexford

Chapter S, Back to a C - Posted by Jonathan Rexford

Posted by Jonathan Rexford on December 11, 2000 at 10:39:17:

Hello,

Does anyone know if you can switch from a Chapter S corp to a C corp. I was told today that you can only do it every five years. I have do some tax planning. I just thought there might be some accountants out there that my know

Thanks
Jonathan

Re: Chapter S, Back to a C - Posted by Mike (PA)

Posted by Mike (PA) on December 11, 2000 at 15:56:24:

Jonathan,

You can switch from a S corp to a C corp at any time. However, if you switch back to a C corp, you cannot make a new S corp election for the next five years. Hope this helps.

Mike

Re: Chapter S, Back to a C - Posted by Matt

Posted by Matt on December 11, 2000 at 12:07:29:

Why are you doing this. I am a CPA and wonder why? Thanks. Matt

Re: Chapter S, Back to a C - Posted by TomC (Md)

Posted by TomC (Md) on December 11, 2000 at 10:46:12:

Yes, you can do it. But you must notify the IRS of your intent (there is a form for it, I just don’t remember the #) before the start of your tax year.

So if you are like most of us that uses a tax year that is the same as a calendar year…you only have a few more weeks to get it in!

I’m not sure of the limit of how many times in a time period.

TomC

Re: Chapter S, Back to a C - Posted by Jonathan Rexford

Posted by Jonathan Rexford on December 11, 2000 at 17:04:38:

Mike,

I had a C Corp and the accountant talked me into a S. Now I want to switch back to a C. I think I’m screwed…lol

Jonathan