Alabama Administrative Code Chapter 810-3-172 — Computation of the Transition Period After Termination of Status as An Alabama S Corporation

810 Alabama Department of Revenue

Ala. Admin. Code r. 810-3-172-.01 Post-Termination Transition Period

(1) The "post-termination transition period" is:

(a) The period that begins on the day following the last day of the last S year, and ending on the later of:

1. One year from the last day of the S year, or

2. The due date, including extensions, for filing the return for the last S year.

(b) The 120-day period beginning on the date of a determination pursuant to an audit of the taxpayer which follows the termination of the corporation's election to be treated as a federal S corporation and which adjusts a subchapter S item of income, loss, or deduction of the corporation.

(c) The 120-day period beginning on the date of a determination that the S corporation's election under 26 U.S.C. §1362 for a previous tax year had been terminated.

(d)1. For example, if (a) above applies, the return, with extensions, will be due not later than 8 ½ months after the year end, and the post-termination transition period would always end one year from the last day of the S year. For instance, if the S year ends on December 31, 1985, the post-termination transition period begins on January 1, 1986, and ends on December 31, 1986.

2. If (c) above applies, and a determination is made on July 1, 1986, that the S election was invalid for the year ended December 31, 1985, the post-termination transition period begins on July 1, 1986, and ends on October 28, 1986.

(2) The term "determination", as used herein, means:

(a) A determination as defined in U.S.C. §1313(a); or

(b) An agreement between the corporation and the U.S. Secretary of the Treasury that the corporation failed to qualify as an S corporation.

(3) The term "S year" means a taxable year for which a corporation is an Alabama S corporation.

History

• Author: Verlon Frost, Catherine McCary, Ed Cutter, CPA
• Authority: Code of Ala. 1975, §§40-2A-7(a)(5), 40-18-57, 40-18-172.
• Adopted November 13, 1985. Amended: Filed March 26, 1998; effective April 30,1998. Amended: Filed March 31, 2000, effective May 5, 2000.