Trawick Construction Co. v. Georgia Department of Revenue

Under Georgia law, income flowing through a Subchapter "S" corporation to its shareholders is subject to Georgia corporate income tax as if the income was received by the corporation, not the shareholders. For this same reason, gain ultimately received by the shareholders in a deemed sale of an "S" corporation's assets pursuant to IRC § 338 (h) (10) is subject to Georgia corporate income tax. As a result, I believe that any gain generated by Trawick Construction Company's deemed sale of assets to Quanta Services, Inc. is taxable as corporate income to Trawick under Georgia law. Therefore, I…