《税收概述》（英文版） Chapier 11 S CORPORATIONS

Chapter M. s Corporation

1 Chapter 11: S Corporations

S CORPORATIONS (1of2) S corporation requirements S corporation election Termination of s election Tax year Ordinary income/loss and separately stated items Special S corporation taxes

2 S CORPORATIONS (1 of 2) S corporation requirements S corporation election Termination of S election Tax year Ordinary income/loss and separately stated items Special S corporation taxes

S CORPORATIONS (2of2) lllll Shareholder allocations Loss limitations Additional limitations Family s corporations Basis adjustments S corporation distributions 3

3 S CORPORATIONS (2 of 2) Shareholder allocations Loss limitations Additional limitations Family S corporations Basis adjustments S corporation distributions

S Corporation Requirements (1 of 2) Shareholder requirements No more than 75 shareholders Individuals, estates or certain types of trusts U.S. citizens or resident aliens Tax-exempt public charity or private foundation may be a shareholder as of1998

4 S Corporation Requirements(1 of 2) Shareholder requirements –No more than 75 shareholders – Individuals, estates or certain types of trusts –U.S. citizens or resident aliens –Tax-exempt public charity or private foundation may be a shareholder as of 1998

S Corporation Requirements (2 of 2) Corporation-related requirements Domestic corporation Must not be an" ineligible corporation Only one class of stock May be a Qualified Subchapter s Subsidiary(QSss

5 S Corporation Requirements(2 of 2) Corporation-related requirements –Domestic corporation – Must not be an “ineligible” corporation –Only one class of stock – May be a Qualified Subchapter S Subsidiary (QSSS)

S Corporation Election Form 2553 must be filed no later than 15th day of third month for year election is to be effective A new corporations tax year begins on first day it acquires assets, has shareholders or begins business All shareholder must consent to election 6

6 S Corporation Election Form 2553 must be filed no later than 15th day of third month for year election is to be effective –A new corporation’s tax year begins on first day it acquires assets, has shareholders or begins business All shareholder must consent to election

Termination of s Election (1of2) S election terminated when Corporation either voluntarily revokes the election (owners of more than 50% of the corporations stock must agree)or Corporation ceases to meet small business corporation requirements

7 Termination of S Election (1 of 2) S election terminated when –Corporation either voluntarily revokes the election (owners of more than 50% of the corporation’s stock must agree) or –Corporation ceases to meet small business corporation requirements

Termination of s Election (2of2) If termination occurs during tax year Portion of year prior to termination is a short s corp year and Portion of year after termination is a short C corp year Inadvertent termination can be undone New s corp election cannot be made for 5 tax years after termination 8

8 Termination of S Election (2 of 2) If termination occurs during tax year –Portion of year prior to termination is a short S corp year and –Portion of year after termination is a short C corp year Inadvertent termination can be undone New S corp election cannot be made for 5 tax years after termination

Tax Year (1of2) Permitted tax years A year ending on December 31, or Any fiscal year where a business purpose has been established including a natural business year

9 Tax Year (1 of 2) Permitted tax years –A year ending on December 31, or –Any fiscal year where a business purpose has been established including a natural business year

Tax Year (2of2) Other tax years may be elected Ownership year-same year as shareholders owning 50%of stock Facts and circumstances year Grandfathered years-IRS approved the year after June 30, 1974 Sec. 444 year-deferral period of 3 months or less with advance payments 10

10 Tax Year (2 of 2) Other tax years may be elected –Ownership year - same year as shareholders owning 50% of stock –Facts and circumstances year –Grandfathered years - IRS approved the year after June 30, 1974 –Sec. 444 year - deferral period of 3 months or less with advance payments