Certain corporations with 100 or fewer stockholders can elect to be treated as a partnership for income tax purposes. These corporations are called Subchapter S or simply S corporations.

Question

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This statement is true. S corporations are a type of corporation that elect to be taxed under Subchapter S of the Internal Revenue Code and are treated as pass-through entities for income tax purposes, much like partnerships.

Certain Corporations with 100 or Fewer Stockholders Can Elect to Be