U.S. Code > Title 26 Internal Revenue Code > Subtitle A—Income Taxes (§§ 1—1564) > CHAPTER 1—NORMAL TAXES AND SURTAXES (§§ 1—1400U3) > Subchapter S—Tax Treatment of S Corporations and Their Shareholders (§§ 1361—1379) > PART III—SPECIAL RULES (§§ 1371—1375) > § 1372. Partnership rules to apply for fringe benefit purposes

§ 1372. Partnership rules to apply for fringe benefit purposes

(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.