S-Corp election

[dennisscott]

In 2007 I formed a Colorado corporation with the intention of starting a service business. Other opportunities shortly intervened and my self-employment plans were put on hold, until now. After the first of the year I intend to proceed with my original plans.

I have been trying to determine if it is too late to make a Sub-S election. I am aware of the three month rules but some reference the "incorporation" while others reference in some way the "operation" of the corp. My corp has just been sitting on the shelf - no tax id, no business has been conducted, nothing. Does this matter?

I know there might be better asset protection with an LLC-S but I'm thinking the aging of the corp might be an advantage, so I'm reluctant to just start new. And as my business would be a single member I'm not confident the courts are going to give me the protection a multi-member LLC would get anyway.

I have been perplexed trying to find a definitive answer to this question and any help you can offer would be appreciated. Thanks for the informative teleseminars; the recent discussion on Nexus has been particularly interesting and informative.

[Diane Kennedy]

If you're just starting the business now (2011), make the election in the first 75 days of the year. (Before 3/15/11) You can make a late election in the year, but it's one more hoop to get it done.

Do it now, effective for 1/1/11 and you'll be set!