C Corporation

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A type of business that may be created by a group of professionals wishing to become incorporated
Pros Less troublesome in daily financial management, minimises current net income—as the income is paid to the physicians as compensation—and minimises current tax liability
Cons At time of sale, up to 60% of the proceeds are paid in taxes by the corporation and by the individual shareholder
References in periodicals archive ?
1363(d) will apply, and recapture of LIFO benefits will be triggered, if two conditions are met: (1) a C corporation elects S status under Sec.
Continuing on with the statute's plain language, a C corporation converting to S status needs only to recapture its "LIFO recapture amount," which is defined as the difference between the value of an inventory asset as it would have been valued using the FIFO method and its value using the taxpayer's LIFO method.
1374 was amended to prevent the potential circumvention of the corporate level of tax on the distribution of appreciated (built-in gain) assets by a former C corporation that held such assets at the time of its conversion to an S corporation.
1374 was not being achieved for former C corporations that used LIFO; a taxpayer that experienced rising acquisition costs would seldom, if ever, experience a decrease in its LIFO reserves.
Without such relief, C corporations sponsoring ESOPs would effectively be prevented from maintaining a SESOP after converting to S status, because they would be required to make in-kind distributions of employer securities and could quickly violate the 75-shareholder requirement.
Subchapter C applies to C corporations and, generally, to S corporations (under Sec.