For each of the following independent cases below, indicate whether the entity will be taxed as an S corporation or a C corporation for the respective period.
a. Richards Corporation, uses the calendar year as its tax year. It files an S election on March 31, 2018. If no reasonable cause is shown, how will Richards Corporation be treated for tax purposes in 2018?
b. Shareholders owning more than 50% of the stock of Harper Corporation, a qualifying calendar-year S corporation, consent to a voluntary revocation statement filed by the corporation on March 12, 2018. How will Harper Corporation be treated for tax purposes in 2018?
c. Shareholders owning more than 50% of the stock of Hazelwood Corporation, a qualifying calendar-year S corporation, consent to a voluntary revocation statement filed by the corporation on March 12, 2018. The prospective termination date is July 1, 2018. How will Hazelwood Corporation be treated for tax purposes in 2018?
d. One of the shareholders of Omni Corporation, a calendar-year S corporation, sells his stock to a Canadian individual on July 8, 2018.
a. To file as an S corporation in 2018, the election had to be filed anytime in 2017 or during the period that starts on January 1, 2018, and ends on March 15, 2018. Since the election was filed after that period, Richards remains a C corporation in 2018 and becomes an S corporation in 2019.
b. Because the corporation filed the revocation on or before March 15 with more than 50% consent, it is taxed as a C corporation for all of 2018.
c. Hazelwood will file a short-period return for the period January 1 through June 30, 2018 as an S corporation and will file a short-period return for the period July 1 through December 31, 2018, as a C corporation.
d. The S corporation terminates on July 7. The corporation files a short-period S corporation tax return for the period January 1 through July 7, 2018, and files a C corporation tax return for the period from July 8 through December 31, 2018.
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