S corporation tax year rules.

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THE USE OF A FISCAL YEAR DEFERS REPORTING of the S corporation's passthrough income to the shareholders and facilitates year-end tax planning. The shareholders can determine their income from the S corporation before their individual calendar tax year ends. This allows them to prepare for the effects of passthrough from the S corporation and implement any appropriate tax planning strategies before the end of their tax years. Further, a fiscal year may result in the deferral of income.

Using a Permitted Year

The S corporation tax-year rules, similar to those governing partnerships, state that an S corp