A shareholder of a Subchapter S corporation is required to personally report his or her proportionate share of corporate net income.

Question

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Subchapter S corporations are pass-through entities, meaning that the profits and losses of the corporation pass through to the shareholders who report them on their personal tax returns. Shareholders are required to report their proportionate share of corporate net income, whether or not the corporation actually distributes that income to them.

A Shareholder of a Subchapter S Corporation Is Required to Personally