Happy news for S-Corps with built-in gains tax!
Is your business an S-Corporation and you want to sell but you are afraid of the tax consequences of those built-in gains that are not yet 10 years old? Relief may be in sight for some of you! he recently passed Small Business Jobs Act provides that for purposes of computing the section 1374 built-in gains tax, beginning in 2011 the recognition period is the five-year period beginning with the first day of the first tax year for which the corporation was an S corporation. That ten-year wait is now over at five years, and can mean many extra dollars will stay in your pocket when you sell that business.