S Corporation

Introduction to the S Corporation - Income or Loss

Introduction to the S Corporation - Income or Loss

What is an S corporation?

An S corporation is a small business entity that is treated as a regular corporation for all purposes other than its treatment under tax law. To make a "subchapter S election," a corporation must satisfy a number of requirements:

  • All shareholders must consent to the S corporation status
  • The number of shareholders is limited to 100 (25 for tax years beginning prior to 2004)
  • The corporation can issue only one class of stock
  • The S corporation must be a domestic corporation, and its shareholders must be citizens or residents of the United States
  • Only individuals, estates, S corporations, and certain trusts can be shareholders of the S corporation