- 15 -
as a corporation * * * can elect its classification for federal
tax purposes as provided in this section”.
In pertinent part, section 301.7701-3(g)(1)(iii), Proced. &
Admin. Regs., provides:
(iii) Association to disregarded entity. If an
eligible entity classified as an association elects * *
* to be disregarded as an entity separate from its
owner, the following is deemed to occur: The
association distributes all of its assets and
liabilities to its single owner in liquidation of the
association.
Section 301.7701-2(a), Proced. & Admin. Regs., states that,
“if * * * [an] entity is disregarded, its activities are treated
in the same manner as a sole proprietorship, branch, or division
of the owner”.
Under section 301.7701-3(c)(1)(i), Proced. & Admin. Regs., a
classification election, including an election to change
classification, is made by filing a Form 8832 with the IRS
service center designated on that form. Under subdivision (iii),
the election is effective “on the date specified by the entity on
Form 8832" if, as in this case, one is specified.
Under section 301.7701-3(g)(3)(i), Proced. & Admin. Regs.,
an election to change classification “is treated as occurring at
the start of the day for which the election is effective”, and
“[a]ny transactions that are deemed to occur * * * as a result of
a change in classification [e.g., in the case of a change in
classification from association to disregarded entity, the deemed
liquidation] are treated as occurring immediately before the
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011