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26 U.S.C. § 1372 — Partnership rules to apply for fringe benefit purposes

submitted 44 years ago by Pub. L. 97-354 to r/title-26-INTERNAL-REVENUE-CODE · 116 words · no verdicts yet

in plain englishAI-generated · not legal advice

For employee fringe-benefit rules, an S corporation is treated as a partnership and a qualifying shareholder is treated as a partner. A “2-percent shareholder” is defined by stock ownership or voting power during the tax year.

(a) General rule. For this subtitle's employee fringe-benefit rules: (1) treat the S corporation as a partnership; and (2) treat each “2-percent shareholder” as a partner of that partnership. (b) “2-percent shareholder” defined. This section does not otherwise define the term; it means a person who owns, or is treated under section 318 as owning, on any day during the S corporation's tax year more than 2 percent of its outstanding stock or stock having more than 2 percent of the total combined voting power of all its stock.
the actual law source: uscode.house.gov ↗public domain
(a) General rule

For purposes of applying the provisions of this subtitle which relate to employee fringe benefits—

(1)

the S corporation shall be treated as a partnership, and

(2)

any 2-percent shareholder of the S corporation shall be treated as a partner of such partnership.

(b) 2-percent shareholder defined

For purposes of this section, the term “2-percent shareholder” means any person who owns (or is considered as owning within the meaning of section 318) on any day during the taxable year of the S corporation more than 2 percent of the outstanding stock of such corporation or stock possessing more than 2 percent of the total combined voting power of all stock of such corporation.

Source credit: (Added Pub. L. 97–354, § 2, Oct. 19, 1982, 96 Stat. 1682.)

history & why it existsrecord from the source credit
  • 1982Enacted · Pub. L. 97-354 · 96 Stat. 1682

A history note hasn’t been published yet. The record shows enactment by Pub. L. 97-354 on 1982-10-19.

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