Part 2 Business Entities, Classification and Elections question: entity's classification

Part 2Business Entities, Classification and Elections

An election on Form 8832 to change an entity's classification can take effect no earlier than:

A 12 months before the form is filed
B The first day of the tax year of filing
C 75 days before the form is filed
D The date the IRS approves it

Show the answer and explanation

Answer: C. 75 days before the form is filed

A Form 8832 election can be effective up to 75 days before the filing date and no more than 12 months after it. After a change in classification, another change generally cannot be made for 60 months. Late election relief is available under Rev. Proc. 2009-41 in some cases. Source: Treas. Reg. 301.7701-3(c)(1)(iii)-(iv); Form 8832 instructions. Tax year: 2025 (law as of 31 Dec 2025).

Common mistake

Assuming an election can reach back to the start of any tax year.

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