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 ?
There are, however, circumstances where section 1041 treatment may be desirable, such as when the business is a C corporation with no earnings or profits.
1363(d) will apply, and recapture of LIFO benefits will be triggered, if two conditions are met: (1) a C corporation elects S status under Sec.
Continuing on with the statute's plain language, a C corporation converting to S status needs only to recapture its "LIFO recapture amount," which is defined as the difference between the value of an inventory asset as it would have been valued using the FIFO method and its value using the taxpayer's LIFO method.
C was a holding company that held stock in other C corporations. It was not engaged in the sale of automobiles.
1363(d) would allow the gain deferred under the LIFO method to completely escape the corporate level of taxation on a C corporation's S election.
1374 was amended to prevent the potential circumvention of the corporate level of tax on the distribution of appreciated (built-in gain) assets by a former C corporation that held such assets at the time of its conversion to an S corporation.
Subchapter C applies to C corporations and, generally, to S corporations (under Sec.
Under pre-RRA law, closely held C corporations (other than personal service corporations) could offset PALS against active income, but not against portfolio income.
Normally, the discharge of indebtedness will result in gross income to the debtor taxpayer, unless (1) he is insolvent, (2) the debt is extinguished in a Title 1 1 bankruptcy or (3) the debt discharged is qualified farm indebtedness.(18) The RRA added one other exception: after 1992, taxpayers (other than C corporations) may elect to exclude from gross income certain income from the discharge of qualified real property business indebtedness (RPBI).(19)