S Corporation


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S Corporation

A corporation that elects not to be taxed as a corporation. That is, the corporation does not directly pay federal income tax on its earnings. Similar to a partnership, it passes its income or losses and other tax items on to its shareholders.

S Corporation

A business with few shareholders that is exempt from some taxes levied on other corporations. Specifically, an S corporation is not responsible for taxes on its profits (corporate taxes) and is taxed as if it were a partnership. However, it may have no more than 100 shareholders. An S corporate structure allows a company to take advantage of some of the benefits of incorporation without all of the responsibilities attached to it.
References in periodicals archive ?
336(e) election is available to both domestic C corporation and S corporation shareholders for qualifying transactions occurring on or after May 15, 2013.
In dispositions where T is an S corporation, all of its shareholders must also make the election, whether or not they are selling their stock, for the election to be effective.
A corporation electing under IRC section 1362 to be taxed as an S corporation is subject to various ownership restrictions, including the requirement that shareholders must be individuals (section 1361(b)(1)(B)).
1377(a)(2) applies to situations in which a shareholder terminates his or her complete interest in the S corporation.
S is an S corporation in the business of tax return preparation.
1502-32 is adapted from the method of calculating basis adjustments for partnership interests and shares in a Subchapter S corporation.
In the first, X was an S corporation that owned 100% of the stock of Sub1, which X elected to treat as a qualified subchapter S subsidiary (QSub) under Sec.
Further, it provided that an S corporation that wholly owns another domestic corporation can elect to treat such subsidiary as a QSub, allowing flowthrough treatment of the QSub's tax items.
TC Memo 1996-303, the court considered the accountant's testimony and advice regarding the reasonableness of the taxpayer's (an S corporation president's) compensation, even though the CPA was not a compensation expert; see also Est.
1367(a)(2), an S shareholder's basis in an S corporation is decreased by each of the following items:
It is not uncommon for an S shareholder with zero stock basis to loan money to the S corporation to use either current year or suspended losses.
The rules are similar to those for determining basis in partnership interests and basis in stock in S corporations.