Discussion:Tax Free Reorg. S Corp to LLC
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Discussion Forum Index --> Advanced Tax Questions --> Tax Free Reorg. S Corp to LLC
Discussion Forum Index --> Tax Questions --> Tax Free Reorg. S Corp to LLC
| 3 September 2008 | |
| An S corp client changed to an LLC. It is my understanding that if the LLC elects to be taxed as an S Corp, we can treat the asset transfer as a tax-free reorganization per Sec. 368(a)(1)(F) (a Type F reorganization). The IRS specifically states that the corp should continue to use the same old EIN.
The problem of my client is, they filed a certification of dissolution already for the S corp effective 12/31/2007 (the LLC started in 2008) -- in order to treat this change from an S corp to an LLC per 368(a)(1)(F), were they supposed to still file a certification of dissolution? If they weren't and they did, will this prevent us from utilizing Sec. 368? Thanks for all your help. | |
| 3 September 2008 | |
| You indicate that the S corp client "changed to an LLC." How did it make the change? (e.g., How were assets transferred? Was there a merger? Was the S corp stock transferred to the LLC and then liquidated?) | |
| 4 September 2008 | |
| The legal dissolution should have no effect on the Type F reorganization. Believe that the statute contains a "however effected" clause. If you are in California, I believe that the California Secretary of State has a simplified method of converting a corporation to an LLC. | |
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