U.S. Tax Law: Internal Revenue Code
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Internal Revenue Code

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USC Title 26 enacted through 2008

§ 1363. Effect of election on corporation

General rule
Except as otherwise provided in this subchapter, an S corporation shall not be subject to the taxes imposed by this chapter.
Computation of corporation's taxable income
The taxable income of an S corporation shall be computed in the same manner as in the case of an individual, except that -
the items described in section 1366(a)(1)(A) shall be separately stated,
the deductions referred to in section 703(a)(2) shall not be allowed to the corporation,
section 248 shall apply, and
section 291 shall apply if the S corporation (or any predecessor) was a C corporation for any of the 3 immediately preceding taxable years.
Elections of the S corporation
In general
Except as provided in paragraph (2), any election affecting the computation of items derived from an S corporation shall be made by the corporation.
In the case of an S corporation, elections under the following provisions shall be made by each shareholder separately -
section 617 (relating to deduction and recapture of certain mining exploration expenditures), and
section 901 (relating to taxes of foreign countries and possessions of the United States).
Recapture of LIFO benefits
In general
If -
an S corporation was a C corporation for the last taxable year before the first taxable year for which the election under section 1362(a) was effective, and
the corporation inventoried goods under the LIFO method for such last taxable year,
the LIFO recapture amount shall be included in the gross income of the corporation for such last taxable year (and appropriate adjustments to the basis of inventory shall be made to take into account the amount included in gross income under this paragraph).
Additional tax payable in installments
In general
Any increase in the tax imposed by this chapter by reason of this subsection shall be payable in 4 equal installments.
Date for payment of installments
The first installment under subparagraph (A) shall be paid on or before the due date (determined without regard to extensions) for the return of the tax imposed by this chapter for the last taxable year for which the corporation was a C corporation and the 3 succeeding installments shall be paid on or before the due date (as so determined) for the corporation's return for the 3 succeeding taxable years.
No interest for period of extension
Notwithstanding section 6601(b), for purposes of section 6601, the date prescribed for the payment of each installment under this paragraph shall be determined under this paragraph.
LIFO recapture amount
For purposes of this subsection, the term "LIFO recapture amount" means the amount (if any) by which -
the inventory amount of the inventory asset under the first-in, first-out method authorized by section 471, exceeds
the inventory amount of such assets under the LIFO method.
For purposes of the preceding sentence, inventory amounts shall be determined as of the close of the last taxable year referred to in paragraph (1).
Other definitions
For purposes of this subsection -
LIFO method
The term "LIFO method" means the method authorized by section 472.
Inventory assets
The term "inventory assets" means stock in trade of the corporation, or other property of a kind which would properly be included in the inventory of the corporation if on hand at the close of the taxable year.
Method of determining inventory amount
The inventory amount of assets under a method authorized by section 471 shall be determined -
if the corporation uses the retail method of valuing inventories under section 472, by using such method, or
if clause (i) does not apply, by using cost or market, whichever is lower.
Not treated as member of affiliated group
Except as provided in regulations, the corporation referred to in paragraph (1) shall not be treated as a member of an affiliated group with respect to the amount included in gross income under paragraph (1).
Special rule
Sections 1367(a)(2)(D) and 1371(c)(1) shall not apply with respect to any increase in the tax imposed by reason of this subsection.

Tax Code (Internal Revenue Code) Section Index

U.S. GAAP by Codification Topic
105 GAAP Hierarchy
105 GAAP History

205 Presentation of Financial Statements
205-20 Discontinued Operations
210 Balance Sheet
210-20 Offsetting
220 Comprehensive Income
225 Income Statement
225-20 Extraordinary and Unusual Items
230 Statement of Cash Flows
250 Accounting Changes and Error Corrections
260 Earnings per Share
270 Interim Reporting

310 Impairment of a Loan
320 Investment Securities
320 Other-Than-Temporary Impairments, FSP FAS 115-2
320-10-05 Overview of Investments in Other Entities
320-10-35 Reclassification of Investments in Securities
323-10 Equity Method Investments
323-30 Investments in Partnerships and Joint Ventures
325-20 Cost Method Investments
330 Inventory

340-20 Capitalized Advertising Costs
350-20 Goodwill
350-30 Intangibles Other than Goodwill
350-40 Internal-Use Software
350-50 Website Development Costs
360 Property, Plant and Equipment
360-20 Real Estate Sales

410 Asset Retirement and Environmental Obligations
420 Exit or Disposal Cost Obligations
450 Contingencies
450-20 Loss Contingencies
450-30 Gain Contingencies
480 Redeemable Financial Instruments

505-20 Stock Dividends, Stock Splits
505-30 Treasury Stock

605 SEC Staff Accounting Bulletin, Topic 13
605-25 Revenue Recognition - Multiple Element Arrangements

715-30 Defined Benefit Plans - Pension
718 Share-Based Payment
730 Research and Development
730-20 Research and Development Arrangements

805 Business Combinations
810 Consolidation
810 Noncontrolling Interests
810 Consolidation of Variable Interest Entities, SFAS 167

815 Derivatives and Hedging Overview

820 Fair Value Measurements
820 Fair value when the markets are not active, FSP FAS 157-4
825 Fair Value Option

830 Foreign Currency Matters
830-20 Foreign Currency Transactions
830-30 Translation of Financial Statements
835 Interest
835-20 Capitalization of Interest
835-30 Imputation of Interest

840 Leases
840-20 Operating Leases
840-30 Capital Leases
840-40 Sale-Leaseback Transactions
845 Nonmonetary Transactions

855 Subsequent Events
860-20 Sale of Financial Assets, SFAS 166
860-50 Servicing Assets and Liabilities, SFAS 156

985-20 Costs of software to be sold

U.S. GAAP Codification
Accounting Topics
Tax Code (Internal Revenue Code) Section Index

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