Title 26 — Internal Revenue CodeRelease 119-73not60
§1373 Foreign Income
Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter S— Tax Treatment of S Corporations and Their Shareholders › Part III— SPECIAL RULES › § 1373
Summary
Count an S corporation as if it were a partnership, and count its shareholders as if they were partners, when applying certain tax rules about income from outside the United States. For the rule in section 904(f) about recapturing overall foreign loss, choosing to start or stop S‑corporation status counts as selling the business.
Full Legal Text
Title 26, §1373
Internal Revenue Code — Source: USLM XML via OLRC
(a)For purposes of subparts A and F of part III, and part V, of subchapter N (relating to income from sources without the United States)—
(1)an S corporation shall be treated as a partnership, and
(2)the shareholders of such corporation shall be treated as partners of such partnership.
(b)For purposes of section 904(f) (relating to recapture of overall foreign loss), the making or termination of an election to be treated as an S corporation shall be treated as a disposition of the business.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Prior Provisions
A prior section 1373, added Pub. L. 85–866, title I, § 64(a), Sept. 2, 1958, 72 Stat. 1652; amended Pub. L. 89–389, § 2(b)(3), Apr. 14, 1966, 80 Stat. 114; Pub. L. 91–172, title III, § 301(b)(10), Dec. 30, 1969, 83 Stat. 586, related to taxation of corporation undistributed taxable income to shareholders, prior to the general revision of this subchapter by section 2 of Pub. L. 97–354.
Statutory Notes and Related Subsidiaries
Effective Date
Section applicable to taxable years beginning after Dec. 31, 1982, see section 6(a) of Pub. L. 97–354, set out as a note under section 1361 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 1373
Title 26 — Internal Revenue Code
Last Updated
Apr 5, 2026
Release point: 119-73not60