S Corporation Status Isn’t Property

S corporation shareholders revoked the S election before filing for bankruptcy (probably to avoid income recognition of cancellation of debt income on their personal returns.) A bankruptcy court had to decide whether S corporation status is property in order to know whether a trustee in bankruptcy could treat the revocation as a fraudulent transfer that could be undone. The court said it’s not property. However, some other courts have held that it is property because it’s something that a person has rights over in order to use, enjoy, or dispose of.