Article Date:
October 2022

Word Count:



Avoid These Common Mistakes When Converting to an S Corporation

At first glance, the corporate tax rules for forming an S corporation appear simple.1


They are not.


As a reader of the Tax Reduction Letter, you know that the tax code is full of hidden rules.


The IRS knows these rules. You need to know them, too.


In this article, we do two things: First, we help you avoid the potholes that destroy your S corporation. Imagine what a shock that is—to find out that what you thought was your S corporation is not an S corporation, but rather a C corporation. Ouch!


Second, we identify some of those rules that work to your advantage when you operate as an S corporation.


Basic Requirements


Here is what your business must look like when it operates as an S corporation:2



The S corporation must be a domestic corporation.


The S corporation must have fewer than 100 shareholders.


The ... Log in to view full article.

Log in to view full article

Already a subscriber?

Email Address


Log In Send me my password

You'll be able to read the full article and get instant access to the last few issues of the Tax Reduction Letter

Not yet a subscriber?
with a money-back guarantee