§ 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.