there actually can be a disadvantage depending on the state. some impose an income tax on the S-Corp earnings. in addition, that state income tax would likely need to be reported on schedule A of your 1040 rather than schedule E.
as others have said each year the S-Corp income would pass through to the shareholders and be taxed as if they earned the income directly.
they would face a problem of having to come up with $$$ to pay the income taxes on the S-Corp income
