S Corporation

(redirected from Subchapter S Corporations)
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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 ?
American Banker uses regulatory data to determine the rankings; however, for companies registered as subchapter S corporations the Return on Equities are adjusted accordingly to allow for fair comparison with their peers.
The assumption that because there is already one unfair business tax, that of double taxation on Subchapter S corporations, that it makes sense to add the same faulty reasoning and the same double taxation to an LLC is faulty logic.
Conversely, Subchapter S corporations generally do not pay tax on profits.
Many of these businesses were incorporated 20 to 30 years ago when limited liability corporations (LLCs) did not exist or were unpopular and Subchapter S corporations had other disadvantages.
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.
The legislation includes important provisions ICBA has long advocated that will allow more small businesses to reduce punitive double taxation and onerous regulations by qualifying as Subchapter S corporations.
Speier amended the bill at the last minute to eliminate the denial of Subchapter S status and to simply impose a tax on Subchapter S Corporations higher than the 1 percent currently imposed, but the bill failed to meet the deadline.
These figures included companies that had zero earnings as well as Subchapter C and Subchapter S corporations.
Under the SBJPA, the law governing subchapter S corporations underwent numerous changes, one area of which will open up new estate planning opportunities for CPAs concerning the types of trusts allowed to hold S corporation stock.
While such concerns appear to be without foundation, there can be no assurance that the earnings of businesses conducted in LLC form will not be subjected to some form of additional entity-level taxation by such States as some jurisdictions already do with respect to Subchapter S corporations.
These simplification measures have attracted bipartisan and bicameral support because they would assist more than three million Subchapter S small businesses across America as well as thousands of other job-creating businesses seeking to become Subchapter S corporations.
63) See Joint Committee on Taxation, Law and Proposals Related To Subchapter S Corporations and Home Office Deductions (JCS-16-95), 5/24/95, Table 3.