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Article: S corporation tax year rules.
- Article from:
- The Tax Adviser
- Article date:
- April 1, 2009
- Author:
CopyrightCOPYRIGHT 2009 American Institute of CPA's. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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[ILLUSTRATION OMITTED]
THE USE OF A FISCAL YEAR DEFERS REPORTING of the S corporation's passthrough income to the shareholders and facilitates year-end tax planning. The shareholders can determine their income from the S corporation before their individual calendar tax year ends. This allows them to prepare for the effects of passthrough from the S corporation and implement any appropriate tax planning strategies before the end of their tax years. Further, a fiscal year may result in the deferral of income.
Using a Permitted Year
The S corporation tax-year rules, similar to those governing partnerships, state that an S corporation must use a ...