thin corporation

thin corporation

A corporation with large debts to its shareholders and very little equity.In such a situation,the IRS may reclassify the debt as equity investment,meaning payments to shareholders do not include tax-deductible interest but are, instead, dividend payments. Thinly capitalized corporations are used for a variety of sophisticated tax planning vehicles.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
Mentioned in ?
References in periodicals archive ?
509 (1970); Hickman, The Thin Corporation: Another Look at an Old Disease, 44 Taxes 883 (1966).
Variable rate preferred stock: current status and prospects for a continuing favorable tax climate in the 1980s and 1990s

Financial browser ?
Full browser ?