Since 1997, insured depository institutions, their holding companies, and the shareholders of such businesses have been eligible to achieve significant savings on income taxes by converting those businesses into “small business corporations” (“S corporations”), which are taxed for federal income tax purposes in a manner similar to partnerships. Generally, the income of the organization is not taxed at all to the corporation but instead “flows through” to the corporation’s shareholders. The income of the S corporation is taxed to the corporation’s shareholders, according to their proportionate interests in the corporation, at federal income tax rates that apply to individuals. Continue reading >