S-Corp Election

§ 1362. Election; revocation; termination(a) Election(1) In generalExcept as provided in subsection (g), a small business corporation may elect, in accordance with the provisions of this section, to be an S corporation. (2) All shareholders must consent to electionAn election under this subsection shall be valid only if all persons who are shareholders in such corporation on the day on which such election is made consent to such election. (b) When made(1) In generalAn election under subsection (a) may be made by a small business corporation for any taxable year—(A) at any time during the preceding taxable year, or (B) at any time during the taxable year and on or before the 15th day of the 3d month of the taxable year. (2) Certain elections made during 1st 2½ months treated as made for next taxable yearIf—(A) an election under subsection (a) is made for any taxable year during such year and on or before the 15th day of the 3d month of such year, but (B) either—(i) on 1 or more days in such taxable year before the day on which the election was made the corporation did not meet the requirements of subsection (b) of section 1361, or (ii) 1 or more of the persons who held stock in the corporation during such taxable year and before the election was made did not consent to the election, then such election shall be treated as made for the following taxable year. (3) Election made after 1st 2½ months treated as made for following taxable yearIf—(A) a small business corporation makes an election under subsection (a) for any taxable year, and (B) such election is made after the 15th day of the 3d month of the taxable year and on or before the 15th day of the 3rd month of the following taxable year, then such election shall be treated as made for the following taxable year. (4) Taxable years of 2½ months or lessFor purposes of this subsection, an election for a taxable year made not later than 2 months and 15 days after the first day of the taxable year shall be treated as timely made during such year. (5) Authority to treat late elections, etc., as timelyIf—(A) an election under subsection (a) is made for any taxable year (determined without regard to paragraph (3)) after the date prescribed by this subsection for making such election for such taxable year or no such election is made for any taxable year, and (B) the Secretary determines that there was reasonable cause for the failure to timely make such election, the Secretary may treat such an election as timely made for such taxable year (and paragraph (3) shall not apply). (c) Years for which effectiveAn election under subsection (a) shall be effective for the taxable year of the corporation for which it is made and for all succeeding taxable years of the corporation, until such election is terminated under subsection (d). (d) Termination(1) By revocation(A) In generalAn election under subsection (a) may be terminated by revocation.