Villiage
Villiage Corp., a calendar year corporation, began business in year 1. Village made a valid S corporation election on December 5, year 4, with unanioums consent of its shareholders. The eligibility requirements for S status continued to be met throughout year 5. On what date did Village's S status become effective?
a, Jan 1, year 4, b Jan 1, year 5, c Dec 5, year 4, d Dec 5, year 5
my answer is b
The S corporation election must be made by the 15th day of the third month of the taxable year to be valid for the current taxable year. If the election is made after that date, it will take effect on the first year of the next taxable year. Since Village Corp. changed into S corporation on December 5th, year 4, Village's S status will begin on January 1st, year 5.
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