Tax Treatment under S Corporations

Feb 3rd, 2012
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An S corporation is a business entity that is formed through an IRS election. S corporations have between one and a hundred shareholders (Sba.gov, 2013). S corporations are taxed only once, through the shareholders. Before a business enterprise can become an S corporation it has first to become a corporation (C Corporation) (Sba.gov, 2013).

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Tax Treatment under S Corporations PaperStudent's NameAffiliationTax Treatment under S CorporationsAn S corporation is a business entity that is formed through an IRS election. S corporations have between one and a hundred shareholders (Sba.gov, 2013). S corporations are taxed only once, through the shareholders. Before a business enterprise can become an S corporation it has first to become a corporation (C Corporation) (Sba.gov, 2013). A business entity is chartered by the regulatory authority in its' home state. Different states have different regulations and requirements before a business is ordained as a corporation (Sba.gov, 2013). Once the corporation has been formed the organization has to go through the IRS stipulations to see whether they meet the requirements need to become an S corporation. If the corporation meets the necessary stipulations then the shareholders a required to file and sign Form 2553 that results in the election of the organization to S corporation status under Subchapter S (Sba.gov, 2013). There is allowance of deduction on charitable contribution as per the taxable year. Contributions are calculated on the basis of accrual (Law, 201

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