Journal Issue:
Agricultural Law Digest: Volume 18, Issue 3

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Cases, Regulations, and Statutes
( 2007-02-02) Achenbach, Robert ; Iowa State University Digital Repository
Hazards in Electing S Corporation Status After a Merger
( 2007-02-02) Harl, Neil ; Iowa State University Digital Repository

The potential for triggering painful income tax liabilities from the “built-in gains” tax1 upon shifting from C corporation status to S corporation status is well known.2 The built-in gains tax is imposed in an effort to thwart attempts by C corporations to elect S corporation status to minimize the effects of the modification of the corporate liquidation rules in the 1986 Act. However, a recent private letter ruling has focused attention on the imposition of the built-in gains tax in the event of a merger without regard to the date of the corporation’s election to be an S corporation.3