When starting a business or changing your business structure, a key aspect to consider is the Small Business Job Act and how it shortens the holding period of assets.
S corporation holding period for appreciated assets shortened to five years. Generally, a C corporation converting to an S corporation must hold onto any appreciated assets for 10 years or face a built-in gain tax at the highest corporate rate of 35%. The 2010 Small Business Jobs Act temporarily shortens the holding period of assets subject to the built-in gains tax to 5 years if the 5th tax year in the holding period precedes the tax year beginning in 2011. ( This information provided by: © 2010 Thomson Reuters/RIA. All rights reserved.)
If you are starting a corporation or changing your business structure the similarities and differences are changing and you should consult your CPA on such a decision.