Posted by Jimmy on November 23, 2005 at 09:36:37:
he must be talking about a local Pennsylvania issue, because S corps are pass-throughs for most federal taxation purposes.
ask him to explain WHY, and then report back to the board.
thanks
Double taxation on S-Corp? - Posted by bruce
Posted by bruce on November 22, 2005 at 21:11:30:
My accountant informed me that if I was to purchase a property using an “S” Corporation, I would not be able to flip it in less than 10 years without paying double taxation (in Pennsylvania). I thought the S corp was a single taxation entity. Can anyone explain?
Re: Double taxation on S-Corp? - Posted by John K Haslach, CPA, MST
Posted by John K Haslach, CPA, MST on December 02, 2005 at 08:47:17:
I believe he may be referring to the Built in Gains tax. If a C Corp owns real estate and becomes an S Corp, the appreciation between the time the C Corp obtained the property and then became an S Corp is taxed to the S Corp. I believe there is a 10 year holding period after becoming an S Corp. I have not had to deal with it, but discuss it with your accountant. If he is not up on this, consider an accountant who is.