Coastal Corporation has been a C corporation for several years and has substantial earnings and profits. Its

Question:

Coastal Corporation has been a C corporation for several years and has substantial earnings and profits. Its tangible business assets are highly appreciated, and the corporation has paid no dividends for several years. The board of directors and its key shareholders are now recommending making an S election, selling the appreciated property, and paying a substantial cash distribution in the initial S corporation tax year. What tax issues should Coastal and its shareholders consider?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...

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