Chapter S Election
/ˈtʃæptər ɛs ɪˈlɛkʃən/
Definitions
- (n.) An election made by a small business corporation to be taxed under Subchapter S of the Internal Revenue Code.
The company filed a Chapter S election to avoid double taxation on corporate income.
Forms
- chapter s election
- chapter s elections
Related terms
See also
Commentary
Typically filed using IRS Form 2553, the Chapter S election allows a corporation to be treated as a pass-through entity for federal tax purposes, avoiding corporate income tax but subjecting income to shareholder taxation.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.