S election effective date

[nongkangma]

My Scorp was incorporated on 01/14/2020, and the S election effective date is 01/101/2019. these two dates are shown on my 2019 Scorp tax return form with the help of a CPA. 

Somehow, when I input these two dates in turbotax for 2020 tax return, the system can't let me go through.

How to fix it?

Thanks!

[M-MTax]

I don't think turbotax is going to let you enter an effective date that's before the incorporation date. You'll have to override or something.

[nongkangma]

I think the two dates are somehow officially shown in 2019 tax return form. 

If I override it or fill in the other dates, the IRS could see it wrong.

[gloriah5200]

Please double check your dates.

Generally, you would create the corporation (incorporate) first and then elect to be taxed as an s corporation after that.

Either the two dates would be the same or the s election should come after the incorporation date.

You can't elect to be an s corporation if you have not created the corporation first.

[nongkangma]

yes, I double checked it on 2019 tax return form. 

It really shows what I mentioned above. 

What should I do next?

[AmeliesUncle]

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@nongkangma wrote:

yes, I double checked it on 2019 tax return form. 

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When was your corporation ACTUALLY formed?

[gloriah5200]

I don't understand what date is entered as: 01/101/2019?  Is it the 10th, the 11th, or the 1st of January in 2019?

Then, if the legal documents show that the S election happened before the initial incorporation, then it could be that they filed Form 2553 to actually create the corporation and elect to be an S corporation at the same time.  

A corporation or other entity eligible to elect to be treated as a corporation must use Form 2553 to make an election under section 1362(a) to be an S corporation. An entity eligible to elect to be treated as a corporation that meets certain tests discussed below will be treated as a corporation as of the effective date of the S corporation election and doesn’t need to file Form 8832, Entity Classification Election.

If that is the actual situation, then you would use the date of the Form 2553 to be the date of incorporation and the date of the s election.

[nongkangma]

very helpful, 01/01/2019, S election effective date. Sorry for the typo!

But the system won't let it go through.

[AmeliesUncle]

As I asked before, when was the legal entity of a corporation ACTUALLY formed with the State?

[nongkangma]

01/14/2020, incorporated date

[AmeliesUncle]

If the corporation did not exist in 2019, how do you have a 2019 tax return?  You can't file a corporate tax return before the entity exists.

[nongkangma]

I didn't do 2019 tax return by myself, that's why I have a lot of questions on it.

I should have gone back to ask my CPA. Thanks!