Abstract:
In US tax law, there exists a unique entity type known as an “S corporation”. An S corporation functions as a pass-through entity, akin to a partnership, yet it issues shares and has shareholders, thereby distinguishing it from partnerships and other pass-through entities. The US tax law governing S corporations is both distinctive and complex, particularly in the context of US inbound transactions. Consequently, the laws relevant to S corporations must be carefully analysed when structuring or engaging in a transaction involving an S corporation. In light of recent developments in laws pertinent to S corporations, this article aims to discuss and analyse general US tax law issues that arise when a non-US investor seeks to acquire a US entity that has elected to be treated as an S corporation for US federal income tax purposes.