What does S corporation mean on the CPA exam?
S corporation. A corporation that elects to be taxed like a partnership, so profit is taxed once in the shareholders' hands. Limited to 100 eligible shareholders and one class of stock.
Defined against Sec. 1361.
Which CPA exam sections use S corporation?
S corporation appears in the REG 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.
- C corporation: A corporation taxed in its own right under subchapter C.
- debt basis: An S corporation shareholder's basis in loans they personally made to the corporation.
- stock basis: A shareholder's investment in S corporation stock for tax purposes.
- accumulated adjustments account: The running total of an S corporation's post-election taxable income less distributions.
- accumulated earnings and profits: The C corporation earnings and profits an S corporation carries into S status.