Definitions for: small business corporation
small business corporation
- under Internal Revenue Code section 1244, corporation that enables shareholders to claim an ordinary loss (rather than a capital loss).
- subchapter s corporationFor legal purposes, an S corporation is no different than other corporations. For tax purposes, however, an S corporation is apartnership. That is, corporate income and losses pass through the shareholders' individual tax returns. To qualify as an S corporation, a company must meet the following requirements: (1) it cannot have more than 35 shareholders; (2) it cannot have more than one class of stock; (3) it cannot have any nonresident foreigners as shareholders; and (4) it must properly elect S corporation status.
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