Question

J. D. formed Clampett, Inc. as a C corporation (calendar tax year) with J. D., Granny, and Jethro, Inc. (a C corporation) as shareholders. On January 15, 2018, Jethro, Inc. sold all its shares to Jane Hathaway. On February 28, 2018, Clampett, Inc. filed an S corporation election, with J. D., Granny, and Jane all consenting to the election. What is the earliest effective date of the S election? A) January 1, 2018. B) January 1, 2019. C) January 1, 2020. D) February 28, 2019. E) Never.

Answer 1

Answer:

B) January 1, 2019

Explanation:

The earliest effective date of the S election after all the shareholders have consented to the election occurs on the first day of the first calendar year following the year that the corporation first had shareholders.