Eligibility Requirements for Filing Form 2553
To be eligible to file Form 2553, a corporation must meet the following requirements:
- Be a domestic corporation: The corporation must have been formed in the United States.
- Have allowable shareholders: Shareholders can be individuals, certain trusts, and estates. However, partnerships, corporations, and non-resident alien shareholders are not permitted.
- Have no more than 100 shareholders: An S corporation cannot exceed 100 shareholders.
- Have only one class of stock: While an S corporation can have both voting and non-voting shares, it cannot have differing classes of stock that offer variations in distribution rights.
- Obtain shareholder consent: All shareholders must consent in writing to the S corporation election.
Where to File 2553 Form in US ?
If you want the tax benefits of an S corporation, you must file IRS Form 2553, “Election by a Small Business Corporation.” This form elects the S corporation tax treatment. Filing this form in the proper manner is crucial to ensure your business receives the preferential tax treatment offered to S corporations.
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