Subchapter S

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Subchapter S

IRS regulation that gives a corporation with 35 or fewer shareholders the option of being taxed as a partnership to escape corporate income taxes.

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 ?

The relevant facts enumerated in the ILM are as follows: (1) An S corporation owned a qualified subchapter S subsidiary (QSub); (2) the QSub was placed in receivership because of its precarious financial condition; (3) the S corporation and its shareholders wanted to pass through an ordinary deduction before the QSub was placed in receivership; and (4) the S corporation therefore terminated its S corporation status, which caused the QSub to become a C corporation immediately before the termination of its parent's Subchapter S status.

Ordinary loss deductions under sec. 165(g)(3) in the S corp. context

2013-30 provides procedures within its scope that are in lieu of the private letter ruling (PLR) process ordinarily used to obtain relief for a late "Election Under Subchapter S" (defined below) pursuant to IRC Sec.

Late S elections: new Rev. Proc. facilitates and extends relief

Soon after subchapter K's codification, Congress introduced a second, simpler pass-through system-- subchapter S -into the federal income tax.

The new revolution in partnership tax?

Conversely, Subchapter S corporations generally do not pay tax on profits.

Sellers: chose carefully to maximize after-tax cash flows

Sid and Al Ruckriegel were 50% shareholders in Sidal Inc., a subchapter S corporation, set up in Indiana.

When payments to an S corporation don't create basis

When selling their businesses, most owners of small C corporations will pay double the tax that they would have paid were they an LLC or Subchapter S corporation.

For sale? How have unprecedented metals prices affected the value of your company?

The letter contained nine specific recommendations for reform of Subchapter S, including those to allow (1) electing small business trusts to deduct interest incurred to acquire S corporation stock, (2) a shareholder debt basis increase for certain related-party of "back-to-back" loans, and (3) repeal of the LIFO recapture tax.

Recommendations made to Congress to reform Subchapter S

Note the breathtaking implications if in the future this decision is extended beyond Subchapter S corporations, to include other business arrangements, such as partnerships, individual proprietorships, or limited liability corporations where there are pass-throughs of tax liability.

Taxation

These figures included companies that had zero earnings as well as Subchapter C and Subchapter S corporations.

Leading the way: how African American businesses can help alleviate unemployment for blacks

They were the possibilities that a smaller corporation's shareholders might elect to be taxed under Subchapter S of the Internal Revenue Code or that a partnership might be established as a limited partnership.

The limited liability company in seven easy lessons: a tax executive's primer

"If you were a Subchapter S, the LLC saves you potential built-in gains tax issues," Anderson said.