S Corp Question

2 Replies

Someone asked me this question, and I did not know the answer. What happens is someone gets an S Corp for flipping but does not do any deals the first year? Does he need to file a return? I would imagine the answer would be yes. I told the person that asked me to consult a cpa, but I'm curious what others here have to say.

Safe bet. You should file a return even if you did not have activity. Some states can be bigger pains the federal on no filing of returns.

If you obtained an EIN, you should really file then.

Disclaimer: As with all tax questions, everybody's situation is different and consult your own tax advisor.

Even though you don't have any deals and therefore income, you probably have expenses you can deduct. If you incurred expenses in year 1 such as filing fees, mileage, insurance, etc it would be prudent to file a return. The loss would be deductible on your personal return.

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