C Corporation


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C Corporation

A corporation that elects to be taxed as a corporation. The C corporation pays federal and state income taxes on earnings. When the earnings are distributed to the shareholders as dividends, this income is subject to another round of taxation (shareholder's income). Essentially, the C corporations' earnings are taxed twice. In contrast, the S corporation's earnings are taxed only once.

C Corporation

A business that is legally completely separate from its owners. Most publicly-traded companies (and all major ones) fall under this classification. For United States tax purposes, C corporations are required to pay income taxes on their profits. The advantage to a C corporate structure is the fact that, unlike S corporations, there is no limit to the number of shareholders. A disadvantage is the fact that, because a C corporation is taxed itself and its individual shareholders are taxed on dividends, it is subject to double taxation.
References in periodicals archive ?
The C Corporation was a holding company that held over 80% of the stock of five corporations engaged in retail auto sales through six dealerships.
1363(d) mandates recapture of the LIFO reserve on the conversion of a C corporation to an S corporation.
Specifically, an eligible C corporation could convert to S status and avoid gain recognition if corporate assets were retained for a 10-year period after the conversion date.
A calendar-year C corporation (C) had been on the LIFO inventory method through 1993.
Does the answer depend on whether or not there is previously accumulated C corporation earnings and profits?
Additionally, if a C corporation has an outstanding obligation that satisfies the definition of straight debt, but is considered equity under general principles of tax law, the obligation would not be treated as a second class of stock if the C corporation converts to S status.