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An S corporation (or S Corp), for United States federal income tax, is a closely held corporation (or, in some cases, a limited liability company (LLC) or a partnership) that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. [1] In general, S corporations do not pay any income taxes.
This summary is based largely on the summary provided by the Congressional Research Service, a public domain source. [1]The Permanent S Corporation Built-in Gains Recognition Period Act of 2014 would amend the Internal Revenue Code of 1986 to reduce from 10 to 5 years the period during which the built-in gains of an S corporation are subject to tax and to make such reduction permanent.
An allocation is not substantial if at the time the allocation becomes part of the partnership agreement, (1) the after-tax economic consequences of at least one partner may be enhanced compared to such consequences if the allocation was not contained in the partnership agreement, and (2) there is a strong likelihood that the after-tax ...
It is also valuable to U.S. corporations with global operations, especially for corporations with income in low-tax countries. Some of the largest and most profitable U.S. corporations pay exceedingly low tax rates [40] through their use of subsidiaries in so-called tax haven countries. [41]
March 17, 2025 – Taxes due for partnerships, multi-member LLCs, and S-corporations April 15, 2025 – Taxes due for C-corporations April 15, 2025 – 1st quarter 2025 estimated tax payment due
Another category of US taxpayers who benefit from check-the-box regulations consists of US flow-through entities (S corporations and partnerships) with foreign subsidiaries. If the foreign subsidiary is treated as a corporation, the taxes it pays to the foreign government do not create a foreign tax credit for the US owner under Section 902 ...
To induce the shareholders of the target company to sell, the acquirer's offer price is usually at a premium over the current market price of the target company's shares. For example, if a target corporation's stock was trading at $10 per share, an acquirer might offer $11.50 per share to shareholders on the condition that 51% of shareholders ...
Generally, the adjustment cannot reduce tax basis below zero. The member's basis is also reduced for distributions, and increased by the member's share of partnership income. Under United States rules, [6] a partner's tax basis is increased to the extent the partner's share of the liabilities of the partnership increases. The partner's tax ...
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