Discussion:R&D Credit Carryover Disposition Upon S Corp Conversion

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Discussion Forum Index --> Advanced Tax Questions --> R&D Credit Carryover Disposition Upon S Corp Conversion


Discussion Forum Index --> Tax Questions --> R&D Credit Carryover Disposition Upon S Corp Conversion

Jwebbb (talk|edits) said:

17 July 2013
I have a client that is a C corporation that we are thinking of advising that he switch to an S corporation now

that the corp. is starting to earn real money. The corp. has an R & D tax credit carryover of about $190K. The corp. is 100% owned by one individual. I just want to make sure he does not lose the ability to take that $190K carryover on his K-1. So for example, if we make the S corp. as of Jan 1, 2013 and under the C corp. scenario it would be expected that the corp. would use up all of the credit carryover in 2013, would the owner's K-1 reflect that $190K in 2013? I think the answer is yes, but I am having a little trouble finding it in research and I thought I would put it out there.

Thanks, Julian

Ckenefick (talk|edits) said:

17 July 2013
http://mcgladrey.com/Tax-Services/Research-Credit-Limitations

See Sec 1371.

Douglasholbrook (talk|edits) said:

18 July 2013
I'm pretty sure that if you do the s election, any carried over credits (as well as any NOL c/o from the c corp years) can only be used to offset any realized built in gain and the resulting tax.

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