Definitions for "Sub-Chapter S Corporation"
An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation. An S corporation generally is exempt from federal income tax. Its shareholders include on their tax returns their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of non-separately stated income or loss. close window
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An Internal Revenue Service rule that allows businesses with 35 or fewer shareholders to enjoy the benefits of incorporation but be taxed as if it were a partnership.