Subchapter S Corporations Can Do Good For Others And Themselves Through Private Non-Operating Foundations

Estate Planning and Tax Advisor & Alert

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PUBLISHED ON: December 1, 2005

Suppose a client owns a substantial interest in a successful Subchapter S corporation (“S corporation”). An S corporation is generally a closely held corporation whose shareholders elect on behalf of the corporation to be treated for most tax purposes as a partnership so that income earned by the corporation is taxed only to the shareholders in the year it is earned. On the other hand, the income earned by a regular corporation (“C corporation”) is taxed to the C corporation in the year it is earned and taxed again to the shareholders in the year dividends are paid to them.