A Journey Through Subchapter S / A Review of The Not So Obvious & The Many Traps That Exist For The Unwary: Part XIV – An S Corporation Is Not Always a Mere Extension of Its Shareholders

In this Part XIV of my multi-part series on some of the not-so-obvious aspects of Subchapter S, I explore a narrow aspect of Subchapter S that is often ignored or forgotten.  An S corporation is not always a mere extension of its shareholders.

Because of the pass-through nature of Subchapter S, taxpayers and their advisers often conclude that an S corporation is a mere extension of its shareholders.  That is not always the case.  A 2012 decision of the U.S. Tax Court provides a good illustration of this point.