S termination year not created. (i) On January 1, 1993, the first day of its tax- able year, a subchapter C corporation had three eligible shareholders. During 1993, the corporation properly elected to be treated as an S corporation effective January 1, 1994, the first day of the succeeding taxable year. Subsequently, a transfer of some of the stock in the corporation was made to an ineligible shareholder. The ineligible shareholder still holds the stock on January 1, 1994.
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Samples: www.govinfo.gov, www.govinfo.gov, www.govinfo.gov