If an individual and his or her spouse have a community
2002-39, 2002-22 I.R.B. 1046, and Rev. Rul. 87-57, 1987-2
interest in the stock or in the income from it, both must
C.B. 117.
consent. For more information about community property,
Attach a statement showing the relevant facts and
see Pub. 555.
circumstances to establish a business purpose for the
Each tenant in common, joint tenant, and tenant by the
requested fiscal year. For details on what is sufficient to
entirety must consent.
establish a business purpose, see section 5.02 of Rev. Proc.
A minor's consent is made by the minor, legal
2002-39.
representative of the minor, or a natural or adoptive parent of
If your business purpose is based on one of the natural
the minor if no legal representative has been appointed.
business year tests provided in section 5.03 of Rev. Proc.
The consent of an estate is made by the executor or
2002-39, identify which test you are using (the 25% gross
administrator.
receipts, annual business cycle, or seasonal business test).
The consent of an electing small business trust (ESBT) is
For the 25% gross receipts test, provide a schedule showing
made by the trustee and, if a grantor trust, the deemed
the amount of gross receipts for each month for the most
owner. See Regulations section 1.1362-6(b)(2)(iv) for details.
recent 47 months. For either the annual business cycle or
If the stock is owned by a qualified subchapter S trust
seasonal business test, provide the gross receipts from sales
(QSST), the deemed owner of the trust must consent.
and services (and inventory costs, if applicable) for each
If the stock is owned by a trust (other than an ESBT or
month of the short period, if any, and the three immediately
QSST), the person treated as the shareholder by section
preceding tax years. If the corporation has been in existence
1361(c)(2)(B) must consent.
for less than three tax years, submit figures for the period of
Continuation sheet or separate consent statement. If
existence.
you need a continuation sheet or use a separate consent
If you check box Q1, you will be charged a user fee of
statement, attach it to Form 2553. It must contain the name,
$5,800 (subject to change by Rev. Proc. 2018-1 or its
address, and EIN of the corporation and the information
successor). Don’t pay the fee when filing Form 2553. The
requested in columns J through N of Part I.
service center will send Form 2553 to the IRS in Washington,
DC, who, in turn, will notify the corporation that the fee is due.
Column L
Enter the number of shares of stock each shareholder owns
Box Q2
on the date the election is filed and the date(s) the stock was
If the corporation makes a back-up section 444 election for
acquired. Enter -0- for any former shareholders listed in
which it is qualified, then the section 444 election will take
column J. An entity without stock, such as a limited liability
effect in the event the business purpose request isn’t
company (LLC), should enter the percentage of ownership
approved. In some cases, the tax year requested under the
and date(s) acquired.
back-up section 444 election may be different than the tax
year requested under business purpose. See Form 8716,
Column M
Election To Have a Tax Year Other Than a Required Tax
Enter the social security number of each individual listed in
Year, for details on making a back-up section 444 election.
column J. Enter the EIN of each estate, qualified trust, or
exempt organization.
Boxes Q3 and R2
If the corporation isn’t qualified to make the section 444
Column N
election after making the item Q2 back-up section 444
Enter the month and day that each shareholder's tax year
election or indicating its intention to make the election in item
ends. If a shareholder is changing his or her tax year, enter
R1, and therefore it later files a calendar year return, it should
the tax year the shareholder is changing to, and attach an
enter “Section 444 Election Not Made” in the top left corner of
explanation indicating the present tax year and the basis for
the first calendar year Form 1120S it files.
the change (for example, an automatic revenue procedure or
Part III
a letter ruling request).
Part II
Use Part III only if you make the election in Part I.
Form 2553 can’t be filed with only Part III completed.
!
Complete Part II if you checked box (2) or (4) in Part I, item F.
CAUTION
Note. Corporations can’t obtain automatic approval of a
In Part III, the income beneficiary (or legal representative)
fiscal year under the natural business year (box P1) or
of certain qualified subchapter S trusts (QSSTs) may make
ownership tax year (box P2) provisions if they are under
the QSST election required by section 1361(d)(2). Part III
examination, before an appeals (area) office, or before a
may be used to make the QSST election only if corporate
federal court without meeting certain conditions and
stock has been transferred to the trust on or before the date
attaching a statement to the application. For details, see
on which the corporation makes its election to be an S
section 7.03 of Rev. Proc. 2006-46, 2006-45 I.R.B. 859,
corporation. However, a statement can be used instead of
available at IRS.gov/irb/2006-45_IRB#RP-2006-46.
Part III to make the election. If there was an inadvertent
failure to timely file a QSST election, see the relief provisions
Box P1
under Rev. Proc. 2013-30.
A corporation that doesn’t have a 47-month period of gross
The deemed owner of the QSST must also consent to the
receipts can’t automatically establish a natural business year.
S corporation election in column K of Form 2553.
Box Q1
Additional QSST election. If you are making more than
one QSST election, use additional copies of page 4 or use a
For examples of an acceptable business purpose for
separate election statement, and attach it to Form 2553. It
requesting a fiscal tax year, see section 5.02 of Rev. Proc.
must contain all information requested under Part III.
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