Discussion:Converting a C corp with NOL to S corp
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Discussion Forum Index --> Tax Questions --> Converting a C corp with NOL to S corp
| 24 December 2006 | |
| I have a client that has a C corp formed in 8/2005, I have inherited this client from another accountant who just did the 2005 tax returns in October and forgot to file 2553 and obviously did not know of Rev Proc 2003-43.
This C corp had about 5000 in NOL in its first year and now I am about to file for late S election for tax year 2006. However, I am unsure what would happen to the 5000 in NOL upon coversion. Unfortuatnely this corporation has 100K in profit this year and Delware has a 8.9% state income tax on c corp profits so it would not make much sense to wait until TY 2007 for the S election, he would lose more than if he had to forgo the 5000 NOL. Thanks for the help. | |
Mtmckeecpa (talk|edits) said: | 24 December 2006 |
| RDP,
As I recall the NOL stays with the C corp...does not go to the S. | |
| 24 December 2006 | |
| Most tax attributes (including NOL carryforwards) are lost upon conversion from C to S. | |
| December 26, 2006 | |
| Not lost, merely locked up until/unless that corp elects back to C status somewhere in the future. | |
Garygauvin (talk|edits) said: | 26 December 2006 |
| They can certainly be used against built in gains tax while a S corp | |
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