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S Election

By IncNow | Published October 19, 2013

The election by members of a company with one or more U.S. citizens or permanent residents that results in the passing-through of a Corporation’s taxable income or losses to the stockholders. The advantage of the S Election for Corporations is that profits distributed as S-Corporation dividends are treated as passive income not subject to employment taxes if reasonable compensation has been paid to stockholders performing services for the S-Corporation.

When deciding where to form your company, consider that Delaware has advantages over your home state that may benefit you. Go