The IRS has ruled in Rev. Rul. 2009-15 that an entity classified as a partnership for U.S. federal tax purposes that becomes a corporation may elect to be an S corporation without a deemed short year as a C corporation. As a result of the conversion, Y was classified as a corporation for U.S. federal tax purposes.

What is better an S corp or partnership?

A partnership is more information than an S corporation, but they share similar requirements in terms of taxation. Neither business structure has to pay corporate-level taxes on the business. A general partnership has an advantage over most other business types for startup companies because it is easier to organize.

Can you go from LLC to C Corp?

With a statutory conversion, you can transfer your LLC’s assets and liabilities to a corporation without having to dissolve your LLC. The LLC’s former members become corporate shareholders and the company’s assets and liabilities belong to the new corporation.

Can a partnership convert to a S corporation?

Digital resources across a variety of topics to support and enhance your online learning. The IRS has ruled in Rev. Rul. 2009-15 that an entity classified as a partnership for U.S. federal tax purposes that becomes a corporation may elect to be an S corporation without a deemed short year as a C corporation.

Can a partnership be a corporation without a short year?

The IRS has ruled in Rev. Rul. 2009-15 that an entity classified as a partnership for U.S. federal tax purposes that becomes a corporation may elect to be an S corporation without a deemed short year as a C corporation. The ruling provides for two separate fact patterns.

How is a partnership treated as a corporation?

For federal tax purposes, a partnership that converts to a corporation under a state law formless conversion statute will be treated in the same manner as one that makes an election to be treated as an association under § 301.7701-3 (c) (1) (i).

When did y convert to a S corporation?

As a result of the conversion, Y was classified as a corporation for U.S. federal tax purposes. On Feb. 1, 2010, Y elected to be taxed as an S corporation effective on Jan. 1, 2010.