Business Entity Forms Compared: Federal Tax Classification
Each form's federal tax classification is read from its own held source text, not inferred from the state filing or from another form's rule. The table does not state state-law fields, how or when the S corporation election is made, or whether a quoted edition is the current one.
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How does the IRS classify each business form by default?
The federal entity-classification rules set a form's federal tax classification, so the table reads each form's classification from its own held cell and not from the state filing.
| Entity form | Federal tax classification |
|---|---|
| corporation-c | A state-incorporated entity is classified as a corporation for federal tax purposes under the business entity definitions.source |
| general-partnership | Default and elective federal tax classification of a domestic eligible entity by number of owners, quoted from 26 CFR 301.7701-3source |
| limited-partnership | Default and elective federal tax classification of a domestic eligible entity by number of owners, quoted from 26 CFR 301.7701-3source |
| llc-multi-member | Default and elective federal tax classification of a domestic eligible entity by number of owners, quoted from 26 CFR 301.7701-3source |
| llc-single-member | Default and elective federal tax classification of a domestic eligible entity by number of owners, quoted from 26 CFR 301.7701-3source |
| llp | Default and elective federal tax classification of a domestic eligible entity by number of owners, quoted from 26 CFR 301.7701-3source |
Source: 6 entity forms. Each source link opens the authority for its cell. The page source record lists the capture date for every cell, and the SHA-256 and snapshot path of the source document for the cells that have them.
Field definitions
- Federal tax classification
- How the form is classified for federal income tax, with the default and any elective classification the entity-classification rules allow a form that has them, as the held cell states it.
Not established here: what a state filing adds to or changes in these classifications. The state-law fields of these forms, governing instrument, management defaults, ownership transfer, continuity when an owner leaves and how a partnership is created, are not held as cells and are not stated.
What is an LLC taxed as by default, and can it elect a different classification?
An LLC's default federal tax classification depends on its number of owners, and the table reads the default and the elective classification for a single-member LLC and a multi-member LLC from their held cells.
| Entity form | LLC owner-count default |
|---|---|
| llc-multi-member | Owner count and default or elected federal tax classification of a domestic eligible entity, quoted from 26 CFR 301.7701-3, with the state-law components marked as not statedsource |
| llc-single-member | Owner count and default or elected federal tax classification of a domestic eligible entity, quoted from 26 CFR 301.7701-3, with the state-law components marked as not statedsource |
Source: 2 entity forms. Each source link opens the authority for its cell. The page source record lists the capture date for every cell, and the SHA-256 and snapshot path of the source document for the cells that have them.
Field definitions
- LLC owner-count default
- The LLC's default or elected federal tax classification by number of owners, as the held cell states it, with the state-law components marked as not stated.
Not established here: the state-law management defaults of an LLC.
What does a corporation need to qualify as an S corporation?
S corporation status rests on an election by a small business corporation, and the table reads the requirement and the eligibility limits from their held cells.
| Entity form | Federal tax classification | S corporation eligibility |
|---|---|---|
| corporation-s | S corporation status depends on an election under section 1362(a) by a small business corporation; without it the corporation is a C corporation.source | A small business corporation is a domestic corporation, not an ineligible corporation, with up to the stated shareholder count, only permitted shareholder types, no nonresident alien shareholder and one class of stock.source |
Source: 1 entity forms. Each source link opens the authority for its cell. The page source record lists the capture date for every cell, and the SHA-256 and snapshot path of the source document for the cells that have them.
Field definitions
- Federal tax classification
- How the form is classified for federal income tax, with the default and any elective classification the entity-classification rules allow a form that has them, as the held cell states it.
- S corporation eligibility
- The limits a corporation must meet to be a small business corporation that can hold S corporation status, as the held cell states them.
Not established here: how or when the election is made, late-election relief, trust shareholders and the qualified subchapter S subsidiary rule. The cells state the requirement and the eligibility limits only. Not yet checked: whether the edition of the Code that the cells read is the current one.
Can a nonresident alien be a shareholder of an S corporation?
A nonresident alien may not be a shareholder of a small business corporation, which bars the S corporation election. source
| Entity form | Non-US owner rule |
|---|---|
| non-us-owner | A nonresident alien may not be a shareholder of a small business corporation, which bars the S corporation election.source |
Source: 1 entity forms. Each source link opens the authority for its cell. The page source record lists the capture date for every cell, and the SHA-256 and snapshot path of the source document for the cells that have them.
Field definitions
- Non-US owner rule
- Whether a nonresident alien may be a shareholder of a small business corporation and what that does to the S corporation election, as the held cell states it.
This answers the federal shareholder bar only. Not established here: state-law ownership capacity and the federal classification of a foreign entity.
How is a nonprofit corporation treated for federal tax, and what does the exemption application cost?
A nonprofit corporation described in section 501(c) is exempt from federal income tax; section 501(c)(3) lists the charitable class. source Federal exemption application user fee: $600 (Form 1023); $275 (Form 1023-EZ), paid through Pay.gov at filing. source
| Entity form | Federal tax classification | Federal exemption application fee |
|---|---|---|
| nonprofit-corporation | A nonprofit corporation described in section 501(c) is exempt from federal income tax; section 501(c)(3) lists the charitable class.source | Federal exemption application user fee: $600 (Form 1023); $275 (Form 1023-EZ), paid through Pay.gov at filing.source |
Source: 1 entity forms. Each source link opens the authority for its cell. The page source record lists the capture date for every cell, and the SHA-256 and snapshot path of the source document for the cells that have them.
Field definitions
- Federal tax classification
- How the form is classified for federal income tax, with the default and any elective classification the entity-classification rules allow a form that has them, as the held cell states it.
- Federal exemption application fee
- The federal user fee for an exemption application and how it is paid, as the held cell states it.
Not established here: state formation fees and the state-law side of a nonprofit corporation. The IRS page behind the fee states that the amounts are subject to change, so the fee is read as the cell holds it.
How to read Unknown
- Unknown: Verified absence
- The captured authority was searched and shows no such rule or filing. No value is printed because the absence is the finding. The reason and the authority are printed beside the badge.
- Unknown: Not yet verified
- The captured sources did not settle this field yet. No value is printed, not even an earlier one. The reason is printed beside the badge, and an authority is linked only when one was supplied.