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Sec. 1372 Partnership rules to apply for fringe benefit purposes

  • Internal Revenue Code of 1986
  • Chapter 1 -- Normal Taxes and Surtaxes
  • Subchapter S -- Tax Treatment of S Corporations and Their Shareholders
  • Part III -- Special rules

(a) General rule. For purposes of applying the provisions of this subtitle which relate to employee fringe benefits--

(1) the S corporation shall be treated as a partnership, and

(2) any 2-percent shareholder of the S corporation shall be treated as a partner of such partnership.

(b) 2-percent shareholder defined. For purposes of this section, the term "2-percent shareholder" means any person who owns (or is considered as owning within the meaning of section 318) on any day during the taxable year of the S corporation more than 2 percent of the outstanding stock of such corporation or stock possessing more than 2 percent of the total combined voting power of all stock of such corporation.

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