# 26 U.S.C. § 1372: Partnership rules to apply for fringe benefit purposes

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s1372>. Cite pinpoints as 26 U.S.C. § 1372(a)(1).

## § 1372(a) General rule

For purposes of applying the provisions of this subtitle which relate to employee fringe benefits—

**§ 1372(a)(1)** the S corporation shall be treated as a partnership, and

**§ 1372(a)(2)** any 2-percent shareholder of the S corporation shall be treated as a partner of such partnership.

## § 1372(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.

## Connections

Cites: § 318 Constructive ownership of stock

Cited by: § 45R Employee health insurance expenses of small employers; § 162 Trade or business expenses; § 1379 Transitional rules on enactment

## Prior provisions

- A prior section 1372, added Pub. L. 85–866, title I, § 64(a), Sept. 2, 1958, 72 Stat. 1650; amended Pub. L. 87–29, § 2, May 4, 1961, 75 Stat. 64; Pub. L. 89–389, §§ 2(b)(2), 3(a), Apr. 14, 1966, 80 Stat. 114; Pub. L. 91–683, § 1(a), Jan. 12, 1971, 84 Stat. 2067; Pub. L. 94–455, title IX, § 902(c)(3), title XIX, §§ 1901(a)(149), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1609, 1788, 1834; Pub. L. 95–600, title III, § 343, Nov. 6, 1978, 92 Stat. 2843; Pub. L. 95–628, § 5(a), (b), Nov. 10, 1978, 92 Stat. 3628, related to manner, effect, termination, etc., of an election not to be subject to taxes imposed under this chapter, prior to the general revision of this subchapter by section 2 of Pub. L. 97–354.

## Amendments

- 1982-10-19: [Pub. L. 97-354](/26/act/97-354.md), 96 Stat. 1682