Transitioning to an S Corporation involves navigating various tax hurdles. Ensuring a smooth conversion requires addressing issues like built-in gains tax, shareholder compensation, and passive income restrictions. Strategic planning, such as managing basis adjustments and optimizing distributions, can mitigate tax liabilities. Proactive measures, like evaluating potential tax consequences and seeking advice from experts offering tax planning for S Corporations in Marlboro, NJ, are essential for a successful S Corporation conversion.