PRIA, Government Policy, Made Personal

Summary

For tax rules about income from outside the United States, an S corporation is treated like a partnership, and the corporation’s shareholders are treated like partners. For the rule about recapturing an overall foreign loss (section 904(f)), making or ending an election to be an S corporation is treated as if the business were sold.

Title 26, §1373

Internal Revenue Code, Source: USLM XML via OLRC

(a)S corporation treated as partnership, etc.

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)Recapture of overall foreign loss

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.

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.

§1373 Foreign Income