What does C corporation mean on the CPA exam?
C corporation. A corporation taxed in its own right under subchapter C. Its profits are taxed once at the entity and again when distributed, which is the double tax an S election avoids.
Defined against Sec. 1361(a)(2).
Which CPA exam sections use C corporation?
C corporation appears in the TCP section of the CPA exam.
Related terms
- small business corporation: The eligibility test for an S election: a domestic corporation, not an ineligible corporation, with no more than 100 shareholders, no shareholder other than an individual, estate, qualifying trust, or qualifying exempt organization, no nonresident alien shareholder, and one class of stock.
- accumulated adjustments account: The running total of an S corporation's post-election taxable income less distributions.
- S corporation: A corporation that elects to be taxed like a partnership, so profit is taxed once in the shareholders' hands.
- accumulated earnings and profits: The C corporation earnings and profits an S corporation carries into S status.
- recognition period: The window during which a converted C corporation's built-in gains remain exposed to the corporate-level tax.
- contract asset: The right to consideration for goods or services already transferred, where the right still depends on something other than the passage of time.