Cashing Out of the Corporate Business (Part 2)

In the previous post, we discussed the advantages of making an S election five years prior to a corporation selling its assets.  A corporation that makes the S election typically avoids the two levels of tax (corporate level and shareholder level).  However, a corporation that makes an S election and sells its assets within five years can be subject to a corporate-level tax called the “built-in gains tax.”  Nevertheless, an S election may make sense even if the corporation makes such a sale. Read More...