In this lesson, Nick Palazzolo, CPA, breaks down the complexities of S Corporations, beginning with the essentials of eligibility and the process of election from a C-Corp to an S-Corp. He provides an in-depth look at who qualifies to be an S-Corp shareholder, the key requirements that C-Corps must meet to transition successfully, and the vital procedures for making an election that aligns with IRS regulations. Nick also delves into the circumstances that can lead to the revocation of S-Corp status and discusses the intricacies of separately stated items and their significance on the exam. With a focus on practical understanding, he simplifies concepts like the accumulated adjustments account and the treatment of ordinary business income versus separately stated items for S-Corps. Lastly, Nick navigates through the built-in gains tax and how it affects entities switching from C-Corp to S-Corp, ensuring a comprehensive grasp of these critical facets for confident maneuvering through S-Corp related questions on the CPA exam.