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    3 Replies Latest reply on Feb 20, 2010 3:46 PM by dublincpa

    Scorp election

    465927h Newbie
      Does a corporation lose net operating losses if election is made to switch from c-corp to s-corp?
        • Re: Scorp election
          dublincpa Scout
          They are not lost immediately, but don't carry to S Corp years or flow to owners. They are basically carried forward in suspense while an S Corp until the 20 year life is expired or they get eaten up by built in gains from the election if there is an asset sale. If the corp reverts to a C before expiration, they can be used until eaten up or the 20 year expiration passes.

          If the NOLs are substantial, one might consider revoking the S election prior to an asset sale in the future.

          There are many opportunities to effectively utilize NOLs if the circumstances are right and a clear plan is devised and followed.