Members of a single family may be counted as one shareholder for S corporation purposes.

Question

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According to IRS regulations, family members who own shares in an S corporation and who are closely related can be counted as one shareholder for tax purposes. This is known as the family attribution rule. However, each family member who owns shares must still report their share of the S corporation's income, losses, deductions, and credits on their individual tax returns.

Members of a Single Family May Be Counted as One