1120-US: S Corporation not a member of a controlled group (FAQ)

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Question

Why isn't an S Corporation a member of a controlled group?

Answer

Under IRC Regulation 1.1563-1(b)(2)(ii)(C), an S Corporation is treated as an excluded member of a controlled group. An S Corporation is not subject to any tax to which the tax bracket amounts of Section 11(b)(1) apply, or any other tax benefit item to which Section 1561(a) applies. Therefore, you can treat S Corporations as an excluded member of a controlled group.

Related topic: 1120-US: Controlled group FAQs

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