ABSTRACT
S corporation, sometimes called a Subchapter S corporation, is a corporation that has elected to be taxed similar to a partnership. In an S corporation, the owners are treated for tax purposes in a manner such that profits or losses flow through the corporation to the individual or the individuals in proportion to their percentages of ownership. S corporations are treated as a normal corporation, with deductions for qualified expenses and depreciation deducted from the income stream. However, any profits or losses, unlike a regular corporation, pass through to the individual owner or owners. The profits or losses are then applied to the individual tax returns. The provisions of the S corporation are defined in Subchapter S of the Internal Revenue Code.
