§ 660. Election by shareholders of S corporations. (a) Election. If a\ncorporation is an eligible S corporation, the shareholders of the\ncorporation may elect in the manner set forth in subsection (b) of this\nsection to take into account, to the extent provided for in this article\n(or in article thirteen of this chapter, in the case of a shareholder\nwhich is a taxpayer under such article), the S corporation items of\nincome, loss, deduction and reductions for taxes described in paragraphs\ntwo and three of subsection (f) of section thirteen hundred sixty-six of\nthe internal revenue code which are taken into account for federal\nincome tax purposes for the taxable year. No election under this\nsubsection shall be effective unless all shareholders of the corporation\nhave so elected. An eligible S corporation is (i) an S corporation which\nis subject to tax under article nine-A of this chapter, or (ii) an S\ncorporation which is the parent of a qualified subchapter S subsidiary\nsubject to tax under article nine-A, where the shareholders of such\nparent corporation are entitled to make the election under this\nsubsection by reason of subparagraph three of paragraph (k) of\nsubdivision nine of section two hundred eight of this chapter.\n (b) Requirements of election. An election under subsection (a) of this\nsection shall be made on such form and in such manner as the tax\ncommission may prescribe by regulation or instruction.\n (1) When made. An election under subsection (a) of this section may be\nmade at any time during the preceding taxable year of the corporation or\nat any time during the taxable year of the corporation and on or before\nthe fifteenth day of the third month of such taxable year.\n (2) Certain elections made during first two and one-half months. If an\nelection made under subsection (a) of this section is made for any\ntaxable year of the corporation during such year and on or before the\nfifteenth day of the third month of such year, such election shall be\ntreated as made for the following taxable year if\n (A) on one or more days in such taxable year before the day on which\nthe election was made the corporation did not meet the requirements of\nsubsection (b) of section thirteen hundred sixty-one of the internal\nrevenue code or\n (B) one or more of the shareholders who held stock in the corporation\nduring such taxable year and before the election was made did not\nconsent to the election.\n (3) Elections made after first two and one-half months. If an election\nunder subsection (a) of this section is made for any taxable year of the\ncorporation and such election is made after the fifteenth day of the\nthird month of such taxable year and on or before the fifteenth day of\nthe third month of the following taxable year, such election shall be\ntreated as made for the following taxable year.\n (4) Taxable years of two and one-half months or less. For purposes of\nthis subsection, an election for a taxable year made not later than two\nmonths and fifteen days after the first day of the taxable year shall be\ntreated as timely made during such year.\n (5) Authority to treat late elections, etc., as timely. If (A) an\nelection under subsection (a) of this section is made for any taxable\nyear (determined without regard to paragraph three of this subsection)\nafter the date prescribed by this subsection for making such election\nfor such taxable year, or if no such election is made for any taxable\nyear, and\n (B) the commissioner determines that there was reasonable cause for\nfailure to timely make such election, then\n (C) the commissioner may treat such an election as timely made for\nsuch taxable year (and paragraph three of this subsection shall not\napply).\n (6) Years for which effective. An election under subsection (a) of\nthis section shall be effective for the taxable year of the corporation\nfor which it is made and for all succeeding taxable years of the\ncorporation until such
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