Subchapter S
E65833
Subchapter S is the section of U.S. tax law that governs S corporations, allowing certain closely held corporations to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.
Aliases (2)
- S corporation ×1
- S corporations ×1
Statements (47)
| Predicate | Object |
|---|---|
| instanceOf |
U.S. federal tax law provision
→
section of the Internal Revenue Code → |
| addresses |
allocation of income and loss among shareholders
→
built-in gains tax rules for former C corporations → re-election of S corporation status after termination → termination of S corporation status → treatment of distributions from S corporations → treatment of passive investment income in S corporations → |
| administeredBy |
Internal Revenue Service
→
|
| affects |
basis of shareholder loans to corporation
→
basis of shareholder stock → |
| allows |
pass-through of corporate income to shareholders
→
pass-through of corporate losses to shareholders → pass-through of deductions to shareholders → pass-through of tax credits to shareholders → |
| appliesTo |
closely held corporation
→
domestic corporation → |
| benefits |
single level of federal income tax on corporate earnings
→
|
| codifiedIn |
Title 26 of the United States Code
→
|
| contrastsWith |
C corporation taxation
→
Subchapter C → |
| effectOnShareholders |
shareholders report pass-through items on individual tax returns
→
shareholders taxed at individual income tax rates → |
| governs |
S corporation
→
|
| historicalContext |
created to encourage small business incorporation
→
|
| implementedBy |
Form 2553
→
|
| imposes |
eligibility requirements for S corporation status
→
|
| influences |
choice of entity decisions for small businesses
→
|
| jurisdiction |
United States federal tax law
→
|
| legalForm |
subchapter of Chapter 1 of the Internal Revenue Code
→
|
| limits |
number of shareholders
→
types of entities that may be shareholders → |
| objective |
avoid double taxation on corporate earnings for qualifying corporations
→
|
| partOf |
Internal Revenue Code
→
|
| primaryPurpose |
pass-through taxation for eligible corporations
→
|
| prohibits |
certain domestic international sales corporations as S corporations
→
certain financial institutions as S corporations → certain insurance companies as S corporations → nonresident alien shareholder → |
| relatedTo |
partnership taxation principles
→
pass-through entity → |
| requires |
corporation must be domestic
→
corporation must have allowable shareholders → corporation must have only one class of stock → corporation must not have more than a specified number of shareholders → election by corporation to be treated as S corporation → |
| taxTreatment |
avoids corporate-level income tax for qualifying corporations
→
|
Referenced by (4)
| Subject (surface form when different) | Predicate |
|---|---|
|
Subtitle A – Income Taxes
("S corporations")
→
|
appliesTo |
|
Internal Revenue Code
→
|
contains |
|
Subchapter C
→
|
distinguishedFrom |
|
Subchapter S
("S corporation")
→
|
governs |