• S Corporation Background
    The S corporation provisions were originally adopted in 1958 for the purposes of:Allowing businesses to select their legal forms free of undue tax influence;Aiding small businesses by taxing the corporation's income to shareholders (who may be in lower brackets than their corporations); andPermitting the shareholders to net their corporate losses against income from other sources.

  • Eligibility to Elect S Corporation Status
    Eligibility to Elect S Corporation Status . Definition . Only a "small business corporation" may elect to be taxed as an S corporation (§ 1362(a)(1)). A small business corporation is a domestic...

  • Electing S Corporation Status
    Electing S Corporation Status . In General . A small business corporation that wishes to avail itself of the benefits of the S corporation rules must file a timely election (§ 1362(b)). These rules...