Although the SCOS rules appear clear (i.e., simply ensure that the S corporation's articles of incorporation authorize only one class of stock), there are several traps that could give rise to a prohibited second class of stock and terminate
First, if it does not eliminate the AEP, and has excess passive investment income (PII) (i.e., more than 25% of gross receipts) for three consecutive years, its S status will terminate
in the fourth year.
CD is the continuing/ resulting partnership; thus, AB terminates
. The proposed regulations do not address A's and B's capital account balances in CD after the merger and the land's Sec.
If a QSST election is not made, the S election technically terminates
, because the trust is an ineligible shareholder.
If the asset that S sells to B is a partnership interest and the partnership remains in existence (i.e., another partner owns an interest in the partnership, so that the partnership does not terminate
On admission of another shareholder to the QSub, the QSub election terminates
; the QSub becomes a C corporation.
The LLC terminates
for tax purposes, resulting in gain or loss on the sale of their LLC interests to the selling members under Sec.
On November 30, 2015, Tongda Venture reported it did not obtain the approval of the China Securities Regulatory Commission for the non-public offering within the validity period of its shareholders' approval, and therefore decided to terminate
its non-public offering related to the restructuring.
A Contractor who terminates
on account of the Employer's breach is typically entitled to immediate payment of sums due to it under the contract, together with out of pocket expenses (including its demobilisation costs) and interest.
A corporation's S election terminates
effective on the date that the company commits the act that triggers the ineligibility.
The adjustment will be accelerated when a taxpayer ceases to engage in the trade or business or terminates
Northwest's pilots say they will strike if the airline terminates