# SCorporationReturns,1996

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SCorporationReturns,1996
by Susan Wittman and Robert Grant

tatistics on S Corporations for Tax Year 1996
reflect the favorable economic conditions for
that year, as well as the continued tax advantages relative to taxable corporations, as the number
of returns filed rose along with higher net income
and lower deficits. The increases followed enactment of the Tax Reform Act of 1986 (TRA 86) and
continued after the Revenue Reconciliation Act of
1993. Provisions of TRA 86 had significant impact
on S Corporations as they encouraged many corporations to elect to have their profits taxed through
shareholders at the newly lowered individual tax
rates, rather than at the higher corporate tax rates.
The Revenue Reconciliation Act of 1993 raised the
top individual tax rate back above the top corporate
tax rate, in effect reversing one of the provisions of
TRA 86.
S Corporations accounted for nearly half of the
4.6 million corporate returns filed for Tax Year 1996.
While S Corporation returns grew by 7.0 percent to
2.3 million, returns of taxable corporations grew by
only 0.3 percent [1]. The term “taxable corporations,” used herein, refers to all corporations other
than S Corporations. S Corporations experienced
average annual growth of 11.1 percent in returns
filed after provisions of TRA 86 improved the tax
benefits associated with S Corporation election.
Taxable corporations experienced an average annual
decline of 1.0 percent in returns filed over the same
period [2,3]. While S Corporations comprised 24.1
percent of all corporation returns for 1986 (the year
before TRA 86 was effective), by 1996, they comprised 49.8 percent of the total.
S Corporations reported total net income (less
deficit) of $125.2 billion for Tax Year 1996, an
increase of 26.3 percent, three times the 8.1-percent
increase for Tax Year 1995 (Figure A). Total net
income (less deficit) is a comprehensive measure of
S Corporation profits in that it encompasses net
income (less deficit) “from a trade or business,” real
estate rental net income (less deficit), net income
(less deficit) from other rental activity, and portfolio
income (less deficit) distributed to shareholders, each
of which is reported separately on the Form 1120S
filed by S Corporations.

S

40

40

Susan Wittman and Robert Grant are economists with the
Corporations Special Projects Section. This article was
written under the direction of Doug Shearer, Chief.

While the number of returns and amount of total
net income (less deficit) for S Corporations continued to rise, their total net income (less deficit) still
comprised a small though growing percentage of
overall corporate net income (less deficit). Adjusted
net income (less deficit) for taxable corporations was
$713.3 billion for Tax Year 1996 [4]. The share of
overall corporate net income (less deficit) attributable to S Corporations was 17.6 percent, up from
15.6 percent the year before.
Over 268,000 corporations filed for the first time
as S Corporations for Tax Year 1996, accounting for
11.7 percent of total S Corporation returns filed.
Newly incorporated businesses represented 71.6
percent of the new filers; the remaining 28.4 percent
were previously taxable corporations. New S Corporations’ share of the total net income (less deficit)
was only 2.6 percent. Thus, much of the growth in
total net income (less deficit) reported is attributable
to growth experienced by existing S Corporations.

AdvantagestoSubchapterSElection
Eligible corporations may benefit greatly from
electing Internal Revenue Code Subchapter S Corporation status. The tax advantage attracting the most
attention is the avoidance of double taxation of
income. Unlike taxable corporations, whose income
is subject to tax at both the corporate level and at the
shareholder level as dividends or capital gains, the
income of S Corporations is generally subject to tax
only at the shareholder level. Shareholders of S
Corporations report their pro rata shares of income
or loss on their own income tax returns and are
assessed tax at their individual income tax rates. The
ability to “pass through” income can result in significant tax savings. The tax savings depend on the
relation between the relevant corporate and individual tax rates, and on the shareholder’s plans for
saving or consuming the income. If the individual
rate exceeds the corporate rate, and if the individual
plans to save rather than consume the income, and
there is a preferential rate on capital gains, then in
some cases, the present value of taxes could be lower
on taxable corporation income than on S Corporation
income. S Corporations share with taxable corporations the advantages of limited liability, unlimited life
span, and freely transferable corporate ownership.
TRA 86 greatly improved the advantages of
Subchapter S status by, for the first time, setting the

S Corporation Returns, 1996

FigureA
All Returns: Income Items for Selected Industrial Divisions, Tax Years 1995 and 1996
[Money amounts are in thousands of dollars]

Industrial division, item

1995

1996

Percentage
change

(1)

(2)

(3)

All industries ¹
Number of returns… … … … ........................................................................................................

2,153,119

Net income (less deficit) from a trade or business......................................................................................................
76,899,029

2,304,416

+7.0

93,138,842

+21.1
+15.2

Net income… … … .....................................................................................................................

115,087,307

132,544,004

Deficit… … … … … .… .....................................................................................................................

38,188,278

39,405,161

+3.2

Total net income (less deficit)......................................................................................................

99,128,672

125,245,496

+26.3

Net income… … … ......................................................................................................................

134,958,619

161,896,380

+20.0

Deficit… … … … … ..… .....................................................................................................................

35,829,947

36,650,884

+2.3

Manufacturing
Number of returns… … … … ........................................................................................................

138,856

Net income (less deficit) from a trade or business......................................................................................................
21,083,883

141,171

+1.7

23,778,603

+12.8
+10.1

Net income… … … .....................................................................................................................

26,207,148

28,863,877

Deficit… … … … .… … .....................................................................................................................

5,123,265

5,085,274

-0.7

Total net income (less deficit)......................................................................................................

24,934,073

28,733,161

+15.2

Net income… … … ......................................................................................................................

29,682,061

33,400,086

+12.5

Deficit… … … … .… … .....................................................................................................................

4,747,988

4,666,926

-1.7

Wholesale and retail trade
Number of returns… … … … ........................................................................................................

537,539

556,908

+3.6

23,439,466

+18.2

29,933,470

33,187,443

+10.9

Deficit… … … … ...… … ..................................................................................................................... 10,102,272

9,747,977

-3.5

Net income (less deficit) from a trade or business......................................................................................................
19,831,198
Net income… … … .....................................................................................................................
Total net income (less deficit)......................................................................................................

24,075,672

29,972,943

+24.5

Net income… … … ......................................................................................................................

33,428,372

39,008,036

+16.7

Deficit… … … … ..… … .....................................................................................................................

9,352,701

9,035,094

-3.4

Finance, insurance, and real estate
Number of returns… … … … ........................................................................................................

326,149

Net income (less deficit) from a trade or business......................................................................................................
4,533,532

356,778

+9.4

6,567,588

+44.9
+25.1

Net income… … … .....................................................................................................................

10,055,178

12,580,546

Deficit… … … … … ...… .....................................................................................................................

5,521,646

6,012,958

+8.9

Total net income (less deficit)......................................................................................................

10,671,258

15,088,860

+41.4

Net income… … … ......................................................................................................................

16,330,818

20,974,039

+28.4

Deficit… … … … ...… … .....................................................................................................................

5,659,560

5,885,179

+4.0

Services
Number of returns… … … … ........................................................................................................

753,890

815,494

+8.2

23,919,085

+18.7

29,309,851

33,973,434

+15.9

Deficit… … … … … … … ..… .....................................................................................................................9,159,880

10,054,350

+9.8

Net income (less deficit) from a trade or business......................................................................................................
20,149,971
Net income… … … .....................................................................................................................
Total net income (less deficit)......................................................................................................

24,785,445

31,113,590

+25.5

Net income… … … ......................................................................................................................

33,255,123

40,313,108

+21.2

Deficit… … … … … … ..… ..................................................................................................................... 8,469,678

9,199,517

+8.6

¹ Includes agriculture, forestry, and fishing; mining; construction; transportation and public utilitites; and nature of business not allocable.

top individual tax rate below the top corporate tax
rate. Therefore, not only did income earned by the
eligible corporation avoid double taxation, it was
taxed to shareholders at the newly lower individual
rate. The Revenue Reconciliation Act of 1993 raised

the top individual rate back above the top corporate
rate, thus reducing but not eliminating the tax benefit
of S Corporation status. The growth of S Corporations has continued despite the increased individual
income tax rate.

41

S Corporation Returns, 1996

SCorporationCriteria

SCorporationSize

S Corporations file Form 1120S, U.S. Income Tax
Return for an S Corporation, and generally use a
calendar tax year to conform to the tax year of the
majority of their shareholders. (Provisions of TRA
86 generally required the use of the calendar year.)
The criteria for S Corporation election did not
change significantly for Tax Year 1996 [5]. A
business entity must have met all of the criteria in
Subchapter S to qualify as an S Corporation. The
criteria for Tax Year 1996 were:

Data for Tax Year 1996 continue to show that, on
average, S Corporations are much smaller than
taxable corporations, when measured in terms of
total assets and net income. Average total assets for
taxable corporations were $11.8 million for Tax Year
1996, while average total assets for S Corporations
were $0.5 million (Table 3) [6]. Average net income
for a taxable corporation was $306,600, while
average total net income for an S Corporation was
just $54,400 (Table 1). S Corporations continued
typically to have a small number of shareholders,
generally far fewer than the statutory limit of 35
(Figure B).

Ø no more than 35 shareholders;
Ø shareholders could only be individuals, estates,
or certain defined trusts;

Ø no nonresident alien shareholders; and
Ø only one class of stock.
Corporations ineligible to elect Subchapter S
status included:

Ø insurance companies;
42

Ø corporations eligible to elect a possessions tax
credit;

Ø banks or building and loan associations to which
Internal Revenue Code section 585 regarding
deductions for bad debt allowance applied;

Ø Interest-Charge Domestic International Sales
Corporations or former Domestic International
Sales Corporations; and

Ø Affiliated group members eligible for inclusion
on a consolidated return.
Corporations that converted from taxable corporations to Subchapter S status were subject to an
additional restriction. If a corporation reported three
consecutive years of “accumulated earnings and
profits” as a taxable corporation and also reported
“passive investment income” exceeding 25.0 percent
of gross receipts, then the corporation’s status as an S
Corporation was revoked, starting with the next tax
year.
42

DistributionofReturnsbyIndustrial
Division
Data for Tax Year 1996 show, as with prior years, a
concentration of S Corporations classified in just
three industrial divisions. Seventy-five percent of all
S Corporation returns were classified in services,
wholesale and retail trade, and finance, insurance,
and real estate (Figure A). The services division
accounted for 35.4 percent of all S Corporation
returns and showed an 8.2-percent increase in the
number of returns filed over the 753,890 returns filed
for 1995. The wholesale and retail trade division
accounted for 24.2 percent of S Corporations, a 3.6percent increase over the 537,539 returns filed for
the previous year, while the finance, insurance, and
real estate division accounted for 15.5 percent, the
third largest number (356,778), and 9.4 percent more
than for Tax Year 1995.

S Corporation Income from a Trade or
Business
Net income (less deficit) that is derived from a trade
or business increased by 21.1 percent for Tax Year
1996 to $93.1 billion and accounted for nearly threequarters of total net income (less deficit) (Figure A).
Positive net income from a trade or business increased by 15.2 percent to $132.5 billion, while net
deficits from a trade or business increased by only
3.2 percent to $39.4 billion. The percentage of
returns reporting positive net income from a trade or
business increased slightly to 61.9 percent for Tax
Year 1996, or 1.4 million out of a total of 2.3 million
returns (Table 2). A decrease in the percentage of
returns reporting net deficits from a trade or business

S Corporation Returns, 1996

FigureB

S Corporations by Number of Shareholders, Tax Year 1996
3
7.7%

4-10
8.3%

Other ¹
0.9%

2
29.9%
2.3 million

1
53.3%
¹ Other category includes returns with more than 10 shareholders and returns for which a number of
shareholders were not reported.
NOTE: Detail may not add to 100 percent due to rounding.

contributed to the overall improved economic
performance of S Corporations taken as a whole, as
the percentage of deficit returns declined slightly
from 39.6 percent to 38.1 percent. All nine industrial
divisions reported an increase in net income from a
trade or business. Five of the nine industrial divisions reported decreases in deficits.
The services division reported an overall increase in net income (less deficit) from a trade or
business of 18.7 percent to $23.9 billion and accounted for nearly 26 percent of the total net income
(less deficit) from a trade or business (Table 1). The
increase was largely attributable to two industry
groups, business services with a $1.3-billion increase
to $8.2 billion and “other” services with a $1.8billion increase to $12.1 billion. “Other” services
include offices of physicians; dentists; or other health
practitioners; nursing and personal care facilities;
hospitals; medical laboratories; and other medical
services; and legal, educational, social, architectural,

engineering, accounting, auditing, and bookkeeping
services. These two groups accounted for 85.2
percent of the total net income (less deficit) from a
trade or business for this division, and also accounted
for the largest increases for the two proceeding years.
The wholesale and retail trade division accounted
for another 25 percent of net income from a trade or
business (less deficit) with $23.4 billion (Figure A).
This division showed an 18.2-percent increase,
compared to a 3.3-percent drop for Tax Year 1995.
While positive net income from a trade or business
increased by 10.9 percent to $33.2 billion, deficits
from trade or business declined by 3.5 percent to
$9.7 billion. This compared with an increase of 19.7
percent in deficits for Tax Year 1995. An increase in
business receipts from $1.1 billion to $1.2 billion
accounted for much of the overall increase for this
division, the second largest industrial division when
ranked by number of returns filed. The miscellaneous wholesaler group contributed the largest

43

S Corporation Returns, 1996

44

amount to net income (less deficit) from a trade or
business. This group includes motor vehicles and
automotive equipment, furniture and home furnishings, lumber and construction materials, and electrical goods. Among retailers, auto dealers and service
stations, along with certain other retail stores, accounted for $6.5 billion of the $10.4 billion reported
for net income (less deficit) from a trade or business.
The manufacturing division, the third principal
division, accounted for only 6 percent of the total
returns filed for S Corporations and yet accounted for
26 percent of the net income (less deficit) from a
trade or business. The fabricated metal products
group contributed $4.3 billion to the $23.8-billion
total for this division. The food and kindred products
group contributed $2.4 billion.
Finance, insurance, and real estate reported the
largest percentage increase (44.9 percent) in net
income (less deficit) from a trade or business for Tax
Year 1996. However, this division accounted for
only for 7.1 percent of all S Corporation net income
from a trade or business, with $6.6 billion. The real
estate group accounted for $3.1 billion of the $6.6
billion net income (less deficit) from a trade or business, the largest single contributor. The real estate
group also contributed the largest amount of net
income from a trade or business for Tax Year 1995.

IncomefromRentalRealEstate

44

For Tax Year 1996, nearly 193,000 S Corporations
reported rental real estate income and expenses on
Form 8825, Rental Real Estate Income and Expenses
of a Partnership or an S Corporation (Table 4). This
represented an increase of 7.9 percent over the
number reported for 1995. Net rental real estate
income (less deficit) increased from $2.3 billion for
Tax Year 1995 to $2.9 billion for 1996, or by 26
percent. As would be expected, the finance, insurance, and real estate division reported the vast
majority of this type of income (65.9 percent).
Nearly 82.0 percent of the increase in net rental real
estate income (less deficit) was also reported by this
one division for 1996. The data show that, as with
prior years, real estate rental net income (less deficit)
within the finance, insurance, and real estate division
remained concentrated in one industrial group, real
estate. This group reported $1.9 billion in net rental
real estate income, 64.5 percent of the net rental
income reported by all S Corporations. Net rental

real estate income (less deficit) for this group also
increased 34.0 percent over the $1.4 billion reported
for Tax Year 1995. The increase in net rental real
estate income (less deficit) for the real estate industrial group can be pinpointed to an 11.3-percent gain
in positive net rental income to $3.4 billion and a 7.1percent decrease in net rental deficit to $1.6 billion.

SCorporationTotalNetIncome
Total net income (less deficit) for an S Corporation
includes net income (less deficit) from a trade or
business, real estate rental income (less deficit), net
income (less deficit) from other rental activity, and
portfolio income (less loss) distributed to shareholders (Figure C). The total of these components is a
comprehensive measure of S Corporation profits.
Total net income (less deficit) increased to
$125.2 billion, up for 1996 by 26.3 percent over the
$99.1 billion reported for Tax Year 1995. Net income (less deficit) from a trade or business accounted for 74.4 percent of the total net income (less
deficit) reported by all S Corporations for Tax Year
1996. The percentage of the total that represented
net income (less deficit) from a trade or business was
down slightly from 77.6 percent for Tax Year 1995;
this was due to the near 50-percent increase of portfolio income for Tax Year 1996 to $28.6 billion.
Portfolio income (or loss) includes interest, dividends, royalties, net long-term and short-term capital
gains and losses, and other income.
Increases in portfolio income (or loss) can be
attributed to increased net long-term capital gains
(less loss), the largest component of portfolio income, for Tax Year 1996. Net long-term capital
gains (less loss) accounted for $7.4 billion of the
$9.5-billion increase in portfolio income (less loss).
Data for 1996 on net capital gain (less loss) reported
by individuals, including shareholders of S Corporations, on individual income tax returns also showed
substantial increases, 43.5 percent for Tax Year
1996, from $111.8 billion to $160.5 billion [7]. The
second largest component of portfolio income was
taxable interest, which amounted to $9.0 billion for
Tax Year 1996, a 17.5-percent increase over Tax
Year 1995.
The services, wholesale and retail trade, and
manufacturing divisions continued to account for the
vast majority (71.7 percent) of total net income (less
deficit). This reflected the predominance of net

S Corporation Returns, 1996

FigureC
All Returns: Total Net Income (Less Deficit), Selected by Industrial Division, Tax Year 1996
[Money amounts are in thousands of dollars]

Agriculture,
Item

All Industries ¹

forestry, and

Mining

Construction

Manufacturing

(3)

(4)

(5)

2,290,463

11,441,644

28,733,161

10,399,598

23,778,603

Portfolio income (less deficit) distributed to shareholders.......................................................................................................................
28,610,573
453,743
561,600
943,688

4,813,724

fishing

(1)

(2)

Total net income (less deficit).......................................................................................................................
125,245,496
1,388,924

Net income (less deficit) from a trade or business.......................................................................................................................
93,138,842
834,788
1,694,207

Dividend income................................................................................................................
1,167,715
25,043

39,607

66,295

167,535

Interest income................................................................................................................
9,015,900
245,363

152,108

687,672

1,250,601

Royalty income (less loss)................................................................................................................
719,000
31,552

154,017

102,661

*4,173

Net short-term capital gain (less loss)................................................................................................................
1,202,698
-4,031
21,810

15,523

25,382

Net long-term capital gain (less loss)................................................................................................................
16,383,117
154,603
245,018

164,438

3,205,306

*395

5,586

10,884

Real estate rental net income (less deficit).......................................................................................................................
2,870,283
74,399
12,226

Other portfolio income (net)................................................................................................................
122,143
*1,213

86,963

101,473

Net income (less deficit) from other rental activity.......................................................................................................................
625,798
25,994
22,429

11,396

39,360

Transportation

Wholesale

Finance,

and public

and retail

insurance

utilities

trade

and real estate

(6)

(7)

(8)

(9)

29,972,943

15,088,860

31,113,590

6,567,588

23,919,085

Portfolio income (less deficit) distributed to shareholders.......................................................................................................................
2,581,942
6,044,947
6,547,374

6,662,405

Item

Total net income (less deficit).......................................................................................................................
5,214,707

Net income (less deficit) from a trade or business.......................................................................................................................
2,505,871
23,439,466

Services

Dividend income................................................................................................................36,592

173,963

489,522

169,157

Interest income................................................................................................................897,805

1,774,321

2,424,462

1,582,420

Royalty income (less loss)................................................................................................................
*3,038

113,919

138,126

171,513

Net short-term capital gain (less loss)................................................................................................................
-36,814
20,427

938,120

222,282

Net long-term capital gain (less loss)................................................................................................................
1,672,952
3,956,172

2,479,307

4,505,321

Other portfolio income net................................................................................................................
8,369

6,146

77,836

11,713

Real estate rental net income (less deficit).......................................................................................................................
69,200
318,741

1,891,402

315,460

82,496

216,640

Net income (less deficit) from other rental activity.......................................................................................................................
57,694
169,789
*Estimate should be used with caution because of the small number of sample returns on which it is based.
¹ Includes nature of business not allocable, not shown separately.
NOTE: Detail may not add to totals because of rounding.

income (less deficit) from a trade or business. The
services division reported a 26.0-percent increase in
total net income (less deficit) to $31.1 billion and
accounted for 25.0-percent of the total net income
(less deficit) reported for all S Corporations, the
largest percentage of all divisions. Net income from

a trade or business accounted for 76.9 percent of total
net income (less deficit) for this industrial division.
Portfolio income (less loss) increased $2.6 billion
with net long-term capital gains (less loss) accounting for $2.2 billion of the total increase for this
division. The two major contributors to the increase
45

S Corporation Returns, 1996

46

46

for the division were business services and other
services; these two groups were also the dominant
groups for Tax Year 1995 and contributed greatly to
the increase in net income (less deficit) from a trade
or business. Business services contributed to the
increase in total net income (less loss) with $2.7
billion, and other services added $2.0 billion to the
$6.3-billion increase for the division for Tax Year
1996.
Manufacturers contributed $3.8 billion, or 14.5
percent, to the overall increase in total net income
(less deficit) for Tax Year 1996. Total net income
(less deficit) grew to $28.7 billion for Tax Year
1996, with most of the increase resulting from the
$2.7-billion increase in net income (less deficit) from
a trade or business and the $1.1-billion increase in
portfolio income (less loss). Net long-term capital
gain (less loss) contributed the greatest amount to the
increase in portfolio income ($0.9 billion) for Tax
Year 1996. Deficit income from a trade or business
declined by 0.7 percent, and total deficit income
declined by 1.7 percent for Tax Year 1996. This
division accounted for 22.9 percent of total net income (less loss) reported by all S Corporations, the
third largest amount.
Wholesalers and retailers reported $30.0 billion
in total net income (less deficit), which represented a
24.5-percent increase over the $24.0 billion reported
for 1995. This division accounted for 23.9 percent of
the $125.2 billion total net income (less deficit) for
all S Corporations (78.2 percent of it was from a
trade or business). A large increase in net income
(less deficit) from a trade or business ($3.6 billion),
accompanied by a large increase in portfolio income
(less loss) ($2.3 billion), accounted for much of the
growth within this division. The increase in portfolio
income (less loss) was largely due to a $2.2-billion
increase in net long term capital gain (less loss) to
$4.0 billion from $1.8 billion for 1995. This division, like manufacturing, experienced a decline in
deficits from a trade or business and total net deficits
of 3.5 percent and 3.4 percent, respectively. These
declines demonstrated improved economic activity as
the number of profitable returns increased and the
number of non-profitable returns declined.
Finance, insurance, and real estate contributed
much less to total net income (less deficit) for Tax
Year 1996 (12.0 percent) than the other three princi-

pal divisions, but did report significant increases.
Increases in the capital gains (less loss) and interest
income included in portfolio income (less loss)
accounted for most of the growth. Total net income
(less deficit) for this division increased by 41.4
percent to $15.1 billion, but unlike the other divisions, this division derived 43.4 percent of total net
income (less deficit) from portfolio income (less
loss), thus accounting for 22.9 percent of total portfolio income (less loss). Net long-term capital gain
(less loss) bolstered portfolio income (less loss) by
$1.1 billion. The real estate group was the largest
contributor to total net income (less deficit) with an
improved $7.2 billion.

TaxationofSCorporations
S Corporations pay relatively few taxes, inasmuch as
they are “flow-through” entities or conduits. As a
flow-through entity, the S Corporation reports the pro
rata shares of income, losses, credits, deductions, and
other miscellaneous items that it allocates to shareholders for tax reporting purposes, without paying
taxes directly at the business entity level, barring a
few exceptions. Less than 1 percent of all S Corporations report any tax directly. The most common
tax is the “built-in gains” tax. This tax is levied on
corporations that elected S Corporation status after
1986 and realized gains on the sale of an asset
representing the gain accumulated from that asset in
years prior to the election and realized less than 10
years after the S election. The tax was designed to
prevent taxable corporations from avoiding double
taxation on a gain by electing Subchapter S status
[8]. Other taxes levied on S Corporations include the
“excess net passive income” tax and the “last-in,
first-out” (LIFO) inventory recapture tax. The
excess net passive income tax is levied on the
“excess passive income” of an S Corporation that has
accumulated earnings and profits from years prior to
the S election, in excess of 25 percent of business
receipts, and net income for the year [9]. The LIFO
inventory recapture tax is applied to the excess value
of inventories resulting from varying methods of
inventory valuation for certain S Corporations [10].
The total taxes reported by S Corporations increased by 11.0 percent for Tax Year 1996 to $192.3
million (Figure D). The built-in gains tax represented 83.6 percent of the total. While the amount of

S Corporation Returns, 1996

FigureD
26.9 percent of the total assets for the division. This
division also accounted for $87.7 billion in net worth
S Corporation Taxes, Tax Years 1995 and 1996
for Tax Year 1996, or 27.0 percent of the net worth
[Money amounts are in thousands of dollars]
of all S Corporations.
The finance, insurance, and real estate division
Item
1995
1996
reported the third largest amount for total assets for
Tax Year 1996 with $198.7 billion. The real estate
Total tax.......................................................................................................................
173,240
192,303
group was the dominant group in terms of number of
Built-in gains tax.......................................................................................................................
141,218
160,682
returns and total assets for this division. The largest
Excess net passive income tax.......................................................................................................................
8,924
10,703
asset account was net depreciable assets, $55.7
Adjustments to tax.......................................................................................................................
20,781
19,869
billion, accounting for 28.1 percent of the total.
Investment credit recapture tax.......................................................................................................................
*1,381
*894
The service division reported the fourth largest
Income tax adjustment.......................................................................................................................
*936
*155
amount
for total assets, $165.4 billion. Net depre*Estimate should be used with caution because of the small number of sample returns
on which it is based.
ciable assets were the largest single asset account,
$62.6 billion, nearly 37.9 percent of the total assets
of the division. Business services and “other” serbuilt-in gains tax was up 13.8 percent for Tax Year
vices, once again, contributed the largest amount to
1996, the increase was down from a 46.6-percent
the division totals.
increase for Tax Year 1995. The excess net passive
income tax for Tax Year 1996 was reported at $10.7
Data by Number of Shareholders
Despite gradual increases in the maximum number of
million, up 19.9 percent over the $8.9 million reallowable shareholders, 99.0 percent of all S Corpoported in the prior year. Adjustments to tax include
rations were owned by ten or fewer shareholders for
LIFO recapture taxes, which amounted to $19.9
Tax Year 1996 (Figure B). Over 90 percent of total
million for 1996.
net income (less deficit) was derived from S CorpoBalanceSheetData
rations with ten or fewer shareholders (Table 5).
Assets reported by all S Corporations for Tax Year
Average total net income for S Corporations with ten
1996 totaled more than $1.1 trillion (Table 3). This
or fewer shareholders was $49,500, compared to the
was 8.1 percent more than the $1.0 trillion reported
average total net income of S Corporations with
for Tax Year 1995. Despite increases in S Corporamore than ten shareholders, $575,000. S Corporation total assets, S Corporations continued to hold a
tions with ten or fewer shareholders had average total
disproportionately small percentage of all corporate
assets of $440,900, while those with more than ten
assets, only 3.8 percent. For Tax Year 1996, the
shareholders had average total assets of $4.4 million.
largest percentage increase in total assets was for
These statistics are consistent with prior years and
mortgage and real estate loans, up 15.2 percent to
confirm that S Corporations continued to be gener$13.1 billion. Net depreciable assets represented the
ally small with a small number of shareholders and
single largest asset category, comprising 26.0 percent
that the larger the number of shareholders, the larger
of the assets reported by all S Corporations.
the company.
The wholesale and retail trade industrial division
reported $335.5 billion in total assets, accounting for
Summary
S Corporations continued to grow at a steady pace, as
30.5 percent of the total assets of all S Corporations
their number increased by 7.0 percent to over 2.3
(Figure E). As anticipated, the largest asset account
million for Tax Year 1996. Increases in net income
was for inventories, nearly 61 percent of all invento(less deficit) from a trade or business and in portfolio
ries reported by S Corporations. This division also
income (less loss) bolstered total net income (less
reported the largest net worth, $95.9 billion, nearly
deficit). Net income (less deficit) from a trade or
30 percent of the net worth of all S Corporations.
business, alone, increased by 21.1 percent to $93.1
The manufacturing division reported the second
billion. Portfolio income (less loss) showed an
largest amount of total assets, $201.6 billion. The
increase of 49.4 percent, mainly due to net long-term
largest asset account was for net depreciable assets,

47

S Corporation Returns, 1996

FigureE

Total Assets, by Selected Industrial Division, Tax Year 1996

Wholesale and
retail trade
30.5%

Finance, insurance,
and real estate
18.1%

$1.1 trillion
All other ¹
9.1%
Construction
9.0%

Services
15.0%

48

Manufacturing
18.3%

¹ Includes agriculture, forestry, and fishing; mining; transportation and public utilities; and nature of business
not allocable.

capital gains (less loss). The growth in these two
components of total net income (less deficit) contributed to the 26.3-percent increase in overall net
income (less deficit) to $125.2 billion. S Corporations continued to be held by a small number of
shareholders, with 99 percent of all S Corporations
being held by ten or fewer shareholders and 90
percent of total net income (less deficit) attributed to
S Corporations with ten or fewer shareholders.
Nearly three-fourths of all S Corporations were
classified in the services, wholesale and retail trade,
and finance, insurance, and real estate industrial
divisions.

DataSourcesandLimitations
48

The statistics for Tax Year 1996 are based on a
sample of S Corporation income tax returns with

accounting periods ending July 1996 through June
1997 that posted to the Internal Revenue Service
Business Master File between July 1996 and the end
of June 1998.
The estimates in this article were based on a
stratified probability sample of 24,864 S Corporation
returns drawn from a total population of 2,420,886
returns. The stratification was based on combinations
of total assets and net income (less deficit) from a
trade or business. Sample rates ranged from 0.25
percent to 100 percent. The sample was selected
after administrative processing but before audit
examination. The selected sample included 24,315
active S Corporation returns; the remainder represented inactive corporations, i.e., those with neither
receipts nor deductions. Based on this count, the
number of active S Corporations for Tax Year 1996

S Corporation Returns, 1996

was estimated to be 2,304,416.
Because the estimates are based on a sample,
they are subject to sampling error. Coefficients of
variation (CV’s) are used to measure the magnitude
of this sampling error. The CV is defined in the
section on sampling variability in the “SOI Sampling
Methodology and Data Limitations” appendix of this
publication. Figure F presents the coefficients of
variation for S Corporations for selected variables by
industrial division. The smaller the coefficient of
variation, the more reliable the estimate is judged to
be .

Number 4; Gill, Amy and Wittman, Susan, “S
Corporation Election After the Tax Reform Act
of 1986,” Statistics of Income Bulletin, Spring
1998, Volume 17, Number 4.
[3] For more information on the growth of S
Corporations and the Revenue Reconciliation
Act of 1993, see Wittman, Susan, “S Corporation Returns, 1995,” Statistics of Income
Bulletin, Spring 1998, Volume 17, Number 4.
[4] Total net income for S Corporations is the result
of combining net income (less deficit) from a
trade or business, rental real estate net income
(less deficit), net income (less deficit) from
rentals other than real estate, and portfolio
income. This constructed measure of S Corporation total net income (less deficit) allows for
comparisons between S Corporation total net
income (less deficit) and net income (less
deficit) of a taxable corporation. It also allows
comparisons to be made with data for S Corporations prior to 1987. Starting with Tax Year
1987, Statistics of Income— Corporation Income
Tax Returns has presented annual data on S
Corporations for only the receipts, deductions,

Notes and References
[1] For purposes of this article, taxable corporation
return types include Form 1120, Form 1120-A,
Form 1120F, Form 1120L, and Form 1120-PC.
Form 1120-REIT and Form 1120-RIC while not
taxable corporations are included in the statistics
along with all other corporations.
[2] For more information on the growth of S
Corporations in the wake of TRA 86, see Gill,
Amy, “S Corporation Returns, 1992,” Statistics
of Income Bulletin, Spring 1995, Volume 14,

FigureF
Coefficients of Variation for Number of Returns, Number of Shareholders, Total Receipts, and
Dividends, by Industrial Division, Tax Year 1996
Number

Number

of

of

Total

Dividend

returns

shareholders

receipts

income

(1)

(2)

(3)

(4)

Industrial division

0.85

0.72

4.31

Agriculture, forestry, and fishing.......................................................................................................................
4.05

All industries ¹.......................................................................................................................
0.27

5.36

5.37

22.93

Mining.......................................................................................................................

12.17

17.04

7.48

10.78

Construction.......................................................................................................................
1.75

2.30

1.92

12.22

Manufacturing.......................................................................................................................
3.18

4.21

1.84

8.05

Transportation and public utilities.......................................................................................................................
4.03
4.70

7.45

11.81

Wholesale and retail trade.......................................................................................................................
1.02

1.65

0.96

9.17

Finance, insurance, and real estate.......................................................................................................................
1.35
2.75

3.49

8.24

Services....................................................................................................................... 0.93

2.15

10.85

1.61

¹ Includes nature of business not allocable, not shown separately.

49

S Corporation Returns, 1996

and net income (or deficit) from a trade or
business. Statistics were not published for
portfolio income and rental income. Consequently, totals for these receipts and for the net
income of all corporations are understated.
[5] For further detail, see Internal Revenue Service,
Internal Revenue Code, Subchapter S, Section
1361(a). The Small Business Jobs Protection
Act of 1996 modified some of the criteria in
Section 1361. Provisions of this Act were
effective for tax years beginning after December
31, 1996. One of the modifications was an
increase in the number of shareholders allowed,
from 35 to 75.

50

[6] For income statement and balance sheet data for
corporations in general, see Statistics of Income— 1996, Corporation Income Tax Returns.
See also Source Book of Statistics of Income,
Corporation Income Tax Returns. Source Book
data are classified by size of total assets for
major and minor industrial groups for taxable
corporations. For S Corporations, data are
presented by size of total assets for each industrial division.
[7] See Cruciano, Therese, “Individual Income Tax
Returns, 1996,” Statistics of Income Bulletin,
Fall 1998, Volume18, Number 2.

[8] For further detail, see Internal Revenue Service,
Internal Revenue Code, Subchapter S, Section
1374. Also see Gill, Amy, “S Corporation
Returns, 1992,” Statistics of Income Bulletin,
Spring 1995, Volume 14, Number 4.
[9] “Passive investment income” means gross
receipts derived from royalties, rents, dividends, interest (excluding interest on installment sales of inventory to customers and
income of certain lending and financing
businesses), annuities, and sales or exchanges
of stock or securities to the extent of any gains.
“Excess net passive income” is the amount that
bears the same ratio to net passive income as
the amount of passive investment income that
exceeds 25 percent of gross receipts bears to
passive investment income.
[10] The recapture of LIFO benefits applies to
corporations that select S Corporation status
after December 17, 1987. A regular, taxable
corporation that maintains its inventory, using
the last-in, first-out (LIFO) method for its last
tax year before an S Corporation election, must
include in gross income a LIFO recapture
amount when it converts to S Corporation
status. The LIFO recapture amount is the
amount, if any, by which the inventory under
the first-in, first-out (FIFO) method exceeds the
inventory amount of such assets under the
LIFO method.
SOURCE: IRS, Statistics of Income Bulletin, Spring
1999

50

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Mining

Item

All
industries

(1)

Agriculture,
forestry,
and fishing

Total

Metal
mining

Coal
mining

extraction

except fuels

(6)

(7)

(2)

(3)

82,712

15,950

*1,275

776

11,729

2,170

Number of shareholders............................................
4,440,778
Income from a trade or business:

209,992

39,318

*7,377

2,867

24,432

4,642

Total receipts ¹......................................................................
2,618,094,172
48,474,500
Business receipts..........................................................
2,571,988,996
46,028,622
Interest on Government obligations:
State and local...............................................................................
719,651
16,934
Net gain, noncapital assets..........................................................
5,687,811
223,612
Other receipts..........................................................
39,697,715
2,205,331

14,563,056
13,366,578

*231,355
*158,175

4,450,347
4,369,616

6,484,577
5,491,178

3,396,777
3,347,608

11,168
211,793
973,518

*46
*32,606
*40,528

*2,616
14,121
63,993

5,805
156,768
830,827

*2,700
8,299
38,170

Total deductions......................................................................
2,524,235,678
47,622,777
Cost of goods sold..........................................................
1,686,903,273
25,024,823
Compensation of officers..........................................................
98,748,923
1,205,415
Salaries and wages..........................................................
229,323,211
3,722,077
Repairs..........................................................
16,881,022
1,077,014
Bad debts.......................................................... 5,445,328
32,950
Rent paid on business property..........................................................
53,480,778
1,601,706
Taxes paid..........................................................53,897,108
994,058
Interest paid..........................................................
28,529,779
1,093,126
Amortization..........................................................3,232,667
34,890
Depreciation..........................................................
44,778,017
2,125,391
Depletion..........................................................
216,613
*11,552
Advertising..........................................................25,016,854
141,915
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
8,525,203
58,069
Employee benefit programs..........................................................
17,847,342
213,242
Net loss, noncapital assets..........................................................
550,963
23,491
Other deductions..........................................................
250,858,598
10,263,061

12,857,681
6,571,646
347,522
989,511
278,337
28,144
154,340
553,541
342,520
35,745
722,192
132,432
17,524

*196,857
*69,782
*1,499
*8,416
*20,970
*146
*6,646
*11,139
*2,628
*1,960
*9,474
*3,103
*1

4,366,366
2,701,546
32,254
225,988
85,607
*4,422
65,630
162,607
98,056
15,650
189,788
46,642
1,500

5,122,405
1,872,514
203,016
571,230
97,915
15,436
63,619
261,277
175,274
13,843
298,801
*16,371
8,277

3,172,053
1,927,805
110,753
183,878
73,845
8,141
18,445
118,518
66,563
4,291
224,128
66,316
7,747

55,612
282,542
12,704
2,333,370

*1,807
*2,328
-*56,959

*9,359
196,183
*1,858
529,278

16,542
44,703
*10,275
1,453,313

27,904
39,328
*571
293,820

Total receipts less total deductions ¹...........................................................
93,858,493
851,722

1,705,375

*34,498

83,981

1,362,172

224,724

1,694,207
2,112,621
418,415

*34,451
*67,687
*33,235

81,364
161,868
80,504

1,356,367
1,593,570
237,203

222,024
289,497
67,473

561,600
39,607
152,108
102,661

*4,019
-*3,983
36

39,885
*3,348
21,617
*3,622

485,958
32,370
104,444
99,004

31,738
3,889
22,064
--

21,810

--

*3,387

18,136

*287

245,018
*395

---

7,911
--

231,666
*339

5,440
*57

74,399
103,337
28,938

12,226
14,306
*2,079

*28
*28
--

*2,271
*2,386
*115

10,432
10,629
*197

-505
1,263
*1,768

25,994
27,787
*1,793

22,429
23,241
*811

60
60
--

*9,675
*9,675
--

*2,348
*3,160
*811

*10,346
*10,346
--

Total net income (less deficit).......................................................................
125,245,496
1,388,924
Net income..........................................................................
161,896,380
3,230,657
Deficit..........................................................................
36,650,884
1,841,732

2,290,463
2,634,466
344,003

*38,559
*69,989
*31,430

133,195
194,205
61,010

1,855,105
2,044,209
189,104

263,603
326,063
*62,459

834,788
2,848,672
2,013,883

Portfolio income (less deficit)
distributed to shareholders.........................................................
28,610,573
453,743
Dividend income..........................................................................
1,167,715
25,043
Interest income..........................................................................
9,015,900
245,363
Royalty income (less loss)..........................................................................
719,000
31,552
Net short-term capital gain
(less loss).......................................................
1,202,698
-4,031
Net long-term capital gain
(less loss).......................................................
16,383,117
154,603
Other portfolio income (net)..........................................................................
122,143
*1,213

(5)

Nonmetallic
minerals,

Number of returns.......................................................................
2,304,416

Net income (less deficit)
from a trade or business.........................................................
93,138,842
Net income..........................................................................
132,544,004
Deficit..........................................................................
39,405,161

(4)

Oil
and
gas

Real estate rental net income
(less deficit)......................................................... 2,870,283
Net income..........................................................................
4,738,874
Deficit..........................................................................
1,868,592
Net income (less deficit)
from other rental activity.........................................................
625,798
Net income..........................................................................
945,454
Deficit..........................................................................319,656

Footnotes at end of table.

51

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Construction
General
building
contractors

Item

Manufacturing

Heavy

Special

Food and

Tobacco

Textile

Total

and
operative
builders

construction
contractors

trade
contractors

Total

kindred
products

manufactures

mill
products

(8)

(9)

(10)

(13)

(14)

(15)

(11)

(12)

Number of returns.......................................................................
234,047

90,545

7,233

136,268

141,171

8,081

3

3,083

Number of shareholders............................................
378,105

142,614

14,333

221,158

338,520

33,490

14

7,327

Total receipts ¹......................................................................
276,283,862 123,058,361
Business receipts..........................................................
274,124,185 122,220,915
Interest on Government obligations:
State and local...............................................................................
76,173
38,836
Net gain, noncapital assets..........................................................
319,638
83,019
Other receipts..........................................................
1,763,867
715,591

29,457,044
28,964,767

123,768,457
122,938,503

450,440,118
445,461,247

59,950,654
59,284,364

235,219
234,831

20,188,074
20,077,566

18,209
132,607
341,461

19,127
104,012
706,816

156,361
1,176,596
3,645,914

9,018
224,107
433,165

-10
378

3,258
6,918
100,332

Total deductions......................................................................
265,808,092 119,927,468
Cost of goods sold..........................................................
207,100,144 103,371,899
Compensation of officers..........................................................
9,474,124
2,857,435
Salaries and wages..........................................................
12,995,285
3,483,591
Repairs.......................................................... 1,327,718
250,170
Bad debts.......................................................... 471,005
195,416
Rent paid on business property..........................................................
2,334,064
564,070
Taxes paid..........................................................5,284,128
1,300,710
Interest paid..........................................................
1,769,995
751,410
Amortization.......................................................... 52,493
16,814
Depreciation..........................................................
4,062,183
758,398
Depletion..........................................................
11,738
*259
Advertising.......................................................... 775,712
307,829
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
875,492
216,017
Employee benefit programs..........................................................
2,065,716
404,481
Net loss, noncapital assets..........................................................
23,230
5,452
Other deductions..........................................................
17,185,064
5,443,517

28,414,597
22,285,625
875,513
1,200,410
225,739
33,118
183,480
591,241
261,456
2,577
1,110,746
11,357
32,207

117,466,026
81,442,620
5,741,175
8,311,284
851,809
242,470
1,586,515
3,392,177
757,130
33,103
2,193,038
*122
435,677

426,505,154
311,295,340
14,186,869
26,510,695
2,048,565
1,004,036
4,458,977
9,061,530
5,081,142
430,500
10,510,009
50,678
3,734,258

57,499,501
45,151,628
958,637
2,687,960
310,766
63,970
402,308
949,318
569,685
52,815
1,202,532
-873,331

202,784
163,519
3,580
6,977
352
333
1,568
5,058
2,150
85
2,428
-2,615

19,774,498
15,517,415
479,175
888,820
78,130
71,563
184,252
375,659
274,109
8,967
489,122
-42,632

133,906
166,020
*582
1,300,621

525,569
1,495,216
17,195
10,440,927

1,915,389
4,664,895
50,027
31,502,243

173,286
454,598
2,942
3,645,726

604
1,249
-12,267

48,099
213,763
*319
1,102,473

Total receipts less total deductions ¹...........................................................
10,475,770
3,130,892

1,042,447

6,302,431

23,934,964

2,451,153

32,435

413,575

1,024,238
1,363,244
339,006

6,283,304
7,379,107
1,095,803

23,778,603
28,863,877
5,085,274

2,442,135
2,787,388
345,252

32,435
32,435
--

410,317
733,956
323,639

193,762
12,884
139,693
*4,172

326,567
32,851
223,928
*1

4,813,724
167,535
1,250,601
154,017

594,457
12,709
137,484
*45,419

775
25
659
6

65,818
5,749
51,217
--

2,650

4,965

25,382

1,710

39

315

33,786
*577

65,068
*-245

3,205,306
10,884

396,396
*740

46
--

8,538
--

73,336
96,597
23,261

14,336
14,393
*56

-709
10,221
10,931

101,473
121,320
19,847

4,309
7,177
2,868

36
41
5

7,989
8,570
*581

7,426
7,613
187

6,344
6,344
--

-2,374
*2,676
*5,051

39,360
47,990
8,629

*-114
*202
*316

----

*1,393
*1,401
8

Total net income (less deficit).......................................................................
11,441,644
3,596,176
Net income..........................................................................
14,275,423
5,087,448
Deficit..........................................................................
2,833,779
1,491,271

1,238,681
1,527,377
288,696

6,606,787
7,660,599
1,053,812

28,733,161
33,400,086
4,666,926

3,040,787
3,341,519
300,731

33,246
33,246
--

485,518
791,337
305,820

Income from a trade or business:

52

Net income (less deficit)
from a trade or business.........................................................
10,399,598
Net income..........................................................................
13,439,342
Deficit..........................................................................
3,039,744

3,092,056
4,696,991
1,604,935

Portfolio income (less deficit)
distributed to shareholders.........................................................
943,688
423,359
Dividend income..........................................................................
66,295
20,560
Interest income..........................................................................
687,672
324,051
Royalty income (less loss)..........................................................................
*4,173
-Net short-term capital gain
(less loss).......................................................
15,523
7,908
Net long-term capital gain
(less loss).......................................................
164,438
65,585
Other portfolio income (net)..........................................................................
5,586
*5,255
Real estate rental net income
(less deficit).........................................................
86,963
Net income..........................................................................
121,211
Deficit..........................................................................34,248
Net income (less deficit)
from other rental activity.........................................................
11,396
Net income..........................................................................
16,634
Deficit..........................................................................*5,238

52

Footnotes at end of table.

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Manufacturing--continued

Item

Apparel

Lumber

and
other
textile

and
wood
products

Paper
Furniture
and
fixtures

and
allied
products

Printing
and
publishing

Chemical

Petroleum

Rubber and

and
allied
products

(including
integrated)
and coal

miscellaneous
plastics
products

products
(16)

products
(17)

(18)

(19)

(20)

(21)

(22)

(23)

Number of returns.......................................................................
6,648

8,526

4,811

2,156

28,248

6,124

382

5,697

Number of shareholders............................................
12,976
Income from a trade or business:

19,972

9,610

5,163

54,770

13,627

736

14,180

Total receipts ¹......................................................................
27,561,745
24,173,223
Business receipts..........................................................
27,164,032
23,851,429
Interest on Government obligations:
State and local...............................................................................
3,748
2,401
Net gain, noncapital assets..........................................................
22,276
93,847
Other receipts..........................................................
371,688
225,547

10,269,378
10,172,129

17,778,142
17,647,450

39,416,750
38,373,810

19,513,687
19,341,909

2,392,577
2,353,604

25,462,548
25,298,684

*3,311
13,113
80,825

15,463
26,742
88,487

14,938
268,470
759,531

4,517
10,989
156,272

*59
*1,323
37,591

12,202
48,821
102,842

Total deductions......................................................................
26,971,249
23,179,900
Cost of goods sold..........................................................
19,867,293
17,923,401
Compensation of officers..........................................................
945,901
556,170
Salaries and wages..........................................................
1,852,267
1,034,946
Repairs..........................................................
53,759
202,716
Bad debts.......................................................... 101,609
29,494
Rent paid on business property..........................................................
400,975
133,317
Taxes paid.......................................................... 579,977
474,655
Interest paid..........................................................374,451
344,409
Amortization.......................................................... 13,021
16,625
Depreciation..........................................................315,674
703,927
Depletion..........................................................
-*31,564
Advertising.......................................................... 208,189
95,837
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
70,206
78,269
Employee benefit programs..........................................................
186,782
194,670
Net loss, noncapital assets..........................................................
*11,071
*469
Other deductions..........................................................
1,990,072
1,359,434

9,854,975
7,182,195
302,773
500,239
37,118
30,632
125,976
220,891
104,215
5,589
170,630
-132,281

16,660,882
12,690,182
468,212
948,679
77,529
22,404
151,671
322,209
189,761
12,682
491,539
-50,935

37,003,123
20,690,179
2,082,416
4,486,880
230,399
150,357
686,032
996,024
515,187
81,502
1,177,621
-475,957

18,418,590
12,711,222
546,568
1,255,288
121,171
82,166
221,673
318,641
234,329
34,389
460,456
3,620
268,389

2,270,020
1,808,193
35,673
93,685
11,538
3,633
12,364
37,535
19,636
*606
48,298
*1,246
5,013

23,864,612
17,512,695
834,662
1,215,318
106,405
34,311
190,688
553,408
327,071
21,400
872,521
-152,820

43,621
122,015
*547
876,253

80,795
172,216
*800
981,269

254,012
446,481
6,874
4,723,202

79,275
192,743
2,900
1,885,760

*6,568
*12,336
-173,695

110,873
319,252
2,670
1,610,516

Total receipts less total deductions ¹...........................................................
590,496
993,323

414,402

1,117,260

2,413,627

1,095,097

122,558

1,597,937

411,092
575,261
164,169

1,101,797
1,249,091
147,294

2,398,689
2,844,445
445,757

1,090,580
1,353,601
263,021

122,499
132,451
*9,952

1,585,735
1,821,347
235,612

48,415
*1,032
21,856
*8

139,922
7,503
58,263
*-22

592,993
25,674
156,638
*18,016

307,265
6,006
49,812
*3,249

7,606
(²)
7,401
*44

132,920
7,137
68,223
*6,240

*99

-233

2,783

-1,507

*28

1,751

*24,152
*1,269

74,310
102

385,582
*4,300

249,385
*321

*89
*44

49,568
--

Net income (less deficit)
from a trade or business.........................................................
586,748
Net income..........................................................................
1,201,115
Deficit..........................................................................
614,367

990,923
1,245,122
254,199

Portfolio income (less deficit)
distributed to shareholders.........................................................
99,810
80,829
Dividend income..........................................................................
13,135
3,026
Interest income..........................................................................
55,007
59,595
Royalty income (less loss)..........................................................................
*2,137
*196
Net short-term capital gain
(less loss).......................................................
*9,645
2,343
Net long-term capital gain
(less loss).......................................................
19,482
13,763
Other portfolio income (net)..........................................................................
*403
*1,905
Real estate rental net income
(less deficit).........................................................
7,881
Net income..........................................................................
10,961
Deficit..........................................................................*3,080

2,800
4,247
*1,447

*725
*725
--

-368
*1,754
*2,122

10,553
14,147
3,594

847
*1,000
*153

*-75
-*75

3,937
6,007
*2,070

Net income (less deficit)
from other rental activity.........................................................
*483
Net income..........................................................................
*483
Deficit..........................................................................
--

4,224
4,224
--

*185
*185
--

----

7,223
7,231
*7

*1,144
*1,145
1

*28
*28
--

*2,504
*3,017
*513

Total net income (less deficit).......................................................................
694,922
1,078,776
Net income..........................................................................
1,285,561
1,314,512
Deficit..........................................................................
590,639
235,736

460,417
615,200
154,783

1,241,351
1,378,958
137,606

3,009,458
3,378,523
369,065

1,399,837
1,652,353
252,517

130,058
139,946
*9,888

1,725,095
1,932,676
207,581

Footnotes at end of table.

53

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Manufacturing--continued

Item

54

Leather

Stone,

and
leather
products

clay, and
glass
products

Primary
metal
industries

Fabricated
metal
products

Machinery,
except
electrical

and
electronic
equipment

Motor
vehicles and
equipment

(24)

(25)

(26)

(27)

(28)

(29)

(30)

Number of returns.......................................................................
1,041

3,407

1,282

20,371

9,064

8,690

1,122

Number of shareholders............................................
1,897
Income from a trade or business:

7,945

3,904

46,211

22,607

23,517

2,478

Total receipts ¹......................................................................
2,573,661
11,972,009
Business receipts..........................................................
2,567,140
11,866,596
Interest on Government obligations:
State and local...............................................................................
*930
4,945
Net gain, noncapital assets..........................................................
*965
19,660
Other receipts..........................................................4,626
80,809

22,200,333
22,091,370

64,813,926
64,137,470

25,745,396
25,528,452

27,593,697
27,332,642

8,846,851
8,792,085

3,293
46,361
59,310

25,356
199,623
451,477

7,153
48,731
161,059

30,995
38,314
191,747

*5,374
11,985
37,407

Total deductions......................................................................
2,507,843
11,096,278
Cost of goods sold..........................................................
1,934,696
7,739,141
Compensation of officers..........................................................
98,833
298,217
Salaries and wages..........................................................
86,380
750,378
Repairs..........................................................
6,318
102,475
Bad debts..........................................................
6,930
25,809
Rent paid on business property..........................................................
19,679
147,410
Taxes paid.......................................................... 46,854
272,557
Interest paid..........................................................31,076
142,168
Amortization..........................................................*10,928
13,968
Depreciation..........................................................28,872
476,629
Depletion..........................................................
-14,163
Advertising.......................................................... 31,920
53,971
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
*6,127
56,783
Employee benefit programs..........................................................
30,982
134,891
Net loss, noncapital assets..........................................................
-*478
Other deductions..........................................................
168,247
867,241

21,414,948
18,817,993
304,917
545,920

60,533,180
44,653,219
2,579,034
3,343,219

23,910,029
16,633,024
1,028,081
1,719,848

25,661,127
18,345,282
841,658
2,052,249

8,332,867
6,930,659
159,201
316,104

80,008
39,324
62,165
247,399
173,788
8,788
376,530
-26,873

280,308
112,959
636,752
1,444,171
705,811
41,178
1,646,852
-297,942

88,470
51,162
263,803
628,211
323,094
23,589
661,448
-217,898

85,617
65,102
247,719
557,182
254,676
16,688
527,347
56
253,291

26,846
6,800
31,308
159,693
73,076
4,284
150,005
-34,112

65,531
143,757

296,083
826,314

186,205
421,688

120,712
275,289

23,173
105,058

*823
521,131

12,792
3,656,546

*899
1,662,608

2,202
2,016,057

*1,243
311,305

Total receipts less total deductions ¹...........................................................
65,817
875,731

785,385

4,280,746

1,835,366

1,932,571

513,984

782,092
952,173
170,081

4,255,390
4,894,290
638,900

1,828,213
2,105,670
277,457

1,901,575
2,250,729
349,153

508,610
537,348
*28,737

145,842
1,337
41,281
995

384,530
22,958
189,409
2,222

165,663
18,604
93,126
7,095

1,287,092
15,013
77,502
6,080

268,076
*5,533
12,204
2,169

321

5,107

134

1,639

282

*101,907
--

164,624
*210

45,402
*1,302

1,186,665
193

*247,888
--

12,366
12,373
*6

4,076
4,256
*181

28,597
29,402
805

4,094
4,177
*83

4,010
4,304
*293

*229
*267
38

*285

*2,570

8,321

1,825

*4,531

*1,330

*702
*417
Total net income (less deficit).......................................................................
78,309
939,980
Net income..........................................................................
143,677
1,076,883
Deficit..........................................................................
*65,369
136,903

*2,583
14
934,579
1,091,225
156,646

9,301
*980
4,676,838
5,267,595
590,757

*2,223
*398
1,999,796
2,260,705
260,910

*4,531
-3,197,209
3,525,491
328,282

*1,330
-778,245
803,287
*25,042

Net income (less deficit)
from a trade or business.........................................................
64,887
Net income..........................................................................
131,032
Deficit..........................................................................
*66,145

870,786
1,027,110
156,324

Portfolio income (less deficit)
distributed to shareholders.........................................................
12,688
56,542
Dividend income..........................................................................
*6,234
6,730
Interest income..........................................................................
5,701
43,720
Royalty income (less loss)..........................................................................
*38
*1,140
Net short-term capital gain
(less loss).......................................................
-*-84
Net long-term capital gain
(less loss).......................................................
*715
4,973
Other portfolio income (net)..........................................................................
-*64
Real estate rental net income
(less deficit).........................................................
*-123
Net income..........................................................................
*71
Deficit..........................................................................*194
Net income (less deficit)
from other rental activity.........................................................
*856
Net income..........................................................................
*856
Deficit.......................................................................... --

54

Electrical

Footnotes at end of table.

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Manufacturing--continued

Item

Transportation and public utilities

Transportation

Instruments

Miscellaneous

Electric,

equipment,
except
motor

and
related
products

manufacturing
and
manufacturing

vehicles
(31)

Total

Transportation

Communication

gas, and
sanitary
services

(37)

not allocable
(33)

(34)

(35)

(36)

Number of returns.......................................................................
2,109

5,484

14,842

98,311

80,342

12,330

5,638

Number of shareholders............................................ 5,013
Income from a trade or business:

16,074

37,011

193,169

146,456

31,921

14,792

Total receipts ¹......................................................................
7,311,895
8,975,635
Business receipts..........................................................
7,157,715
8,888,437
Interest on Government obligations:
State and local...............................................................................
*2,697
*3,844
Net gain, noncapital assets..........................................................
47,662
34,456
Other receipts..........................................................103,820
48,898

23,464,718
23,299,534

109,038,953
106,514,262

86,690,964
85,391,002

14,165,881
13,207,130

8,182,107
7,916,131

2,858
12,222
150,104

43,918
1,085,323
1,395,449

20,785
523,180
755,998

19,688
531,817
407,247

*3,445
30,326
232,205

Total deductions......................................................................
6,885,441
8,188,697
Cost of goods sold..........................................................
5,265,324
4,684,835
Compensation of officers..........................................................
189,860
456,735
Salaries and wages..........................................................
353,497
964,565
Repairs..........................................................
28,838
33,876
Bad debts..........................................................
23,470
28,820
Rent paid on business property..........................................................
77,966
148,774
Taxes paid.......................................................... 184,215
225,163
Interest paid.......................................................... 75,473
84,667
Amortization..........................................................
4,494
32,925
Depreciation.......................................................... 132,310
160,832
Depletion..........................................................
--Advertising..........................................................
38,000
119,867
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
42,198
73,280
Employee benefit programs..........................................................
78,202
111,557
Net loss, noncapital assets..........................................................
*17
*96
Other deductions..........................................................
391,577
1,062,705

22,274,611
15,073,245
1,016,566
1,407,476
85,925
53,188
312,576
462,709
262,312
25,978
414,437
*28
352,384

106,489,164
50,011,767
3,059,748
13,172,326
1,922,860
401,045
4,537,938
3,234,365
1,899,146
346,984
4,869,339
*1,592
746,502

85,215,524
40,502,607
2,319,074
10,606,742
1,696,826
182,143
4,084,325
2,576,731
1,253,516
98,714
3,989,673
-383,485

13,427,420
5,416,311
504,243
1,895,159
115,479
183,595
272,141
385,194
449,044
213,802
527,444
-333,304

7,846,221
4,092,849
236,430
670,425
110,556
35,307
181,473
272,440
196,585
34,468
352,222
*1,592
29,714

99,691
221,053
2,885
2,484,157

281,864
1,044,386
75,438
20,883,863

217,728
879,191
12,115
16,412,653

44,501
80,505
63,130
2,943,568

19,636
84,689
*192
1,527,642

Total receipts less total deductions ¹...........................................................
426,454
786,938

1,190,108

2,549,788

1,475,440

738,462

335,886

1,187,249
1,574,992
387,743

2,505,871
5,519,628
3,013,757

1,454,655
3,376,681
1,922,025

718,774
1,547,694
828,920

332,441
595,253
262,812

293,386
4,536
66,985
36,573

2,581,942
36,592
897,805
*3,038

930,285
18,260
243,428
*2,879

1,509,477
16,155
561,870
--

142,181
2,178
92,507
*160

499

-36,814

2,055

-44,541

*5,673

184,762
32

1,672,952
8,369

662,497
1,166

972,745
*3,248

37,709
*3,955

Net income (less deficit)
from a trade or business.........................................................
423,757
Net income..........................................................................
516,244
Deficit.......................................................................... 92,487

(32)

783,094
898,077
114,982

Portfolio income (less deficit)
distributed to shareholders.........................................................
31,692
97,401
Dividend income..........................................................................
3,127
1,467
Interest income..........................................................................
25,876
28,642
Royalty income (less loss)..........................................................................
238
*22,172
Net short-term capital gain
(less loss).......................................................
*449
*64
Net long-term capital gain
(less loss).......................................................
2,002
*45,056
Other portfolio income (net)..........................................................................
--Real estate rental net income
(less deficit).........................................................
*2,449
Net income..........................................................................
*2,449
Deficit..........................................................................
--

*359
*1,157
*798

6,782
8,236
*1,454

69,200
82,823
13,622

60,067
71,145
11,078

4,566
4,855
*289

*4,567
*6,823
*2,255

Net income (less deficit)
from other rental activity.........................................................
*-1,716
Net income..........................................................................
*4,260
Deficit.......................................................................... *5,976

*373
*373
--

*3,914
*3,914
--

57,694
119,572
61,878

37,004
96,901
59,897

17,517
19,498
*1,981

*3,173
*3,173
--

Total net income (less deficit).......................................................................
456,182
881,227
Net income..........................................................................
546,466
982,757
Deficit.......................................................................... 90,283
101,530

1,491,332
1,838,169
346,838

5,214,707
8,040,558
2,825,851

2,482,012
4,317,767
1,835,755

2,250,334
3,019,113
768,779

482,361
703,678
221,317

Footnotes at end of table.

55

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Wholesale and retail trade
Wholesale trade

Item

Retail trade

Groceries

Machinery,

Miscellaneous

Building
materials,
garden
supplies,
and mobile

General

Total

Total

and
related
products

equipment,
and
supplies

wholesale
trade

Total

merchandise
stores

(38)

(39)

(40)

(41)

(42)

(43)

(44)

Number of returns.......................................................................
556,908

148,370

10,327

23,271

114,772

407,287

19,877

5,202

Number of shareholders............................................
1,059,268

290,578

22,374

44,050

224,154

766,386

36,514

11,025

Total receipts ¹......................................................................
1,225,474,736 508,123,870
Business receipts..........................................................
1,211,072,741 503,414,100
Interest on Government obligations:
State and local...............................................................................
150,731
74,002
Net gain, noncapital assets..........................................................
809,704
381,721
Other receipts..........................................................
13,441,561
4,254,046

61,046,215
60,659,161

48,221,060
47,447,819

398,856,595
395,307,120

715,291,395
705,678,963

32,178,924
31,894,069

9,744,224
9,637,099

2,959
78,119
305,975

8,424
84,408
680,409

62,619
219,194
3,267,662

76,146
427,855
9,108,431

1,405
14,355
269,094

*1,003
*389
105,733

Total deductions......................................................................
1,201,884,539 495,013,130
Cost of goods sold..........................................................
938,458,997 403,220,667
Compensation of officers..........................................................
23,800,574
11,076,209
Salaries and wages..........................................................
83,378,301
27,494,504
Repairs..........................................................
5,741,245
1,773,369
Bad debts.......................................................... 1,857,027
954,724
Rent paid on business property..........................................................
21,978,596
4,991,868
Taxes paid..........................................................
17,628,300
6,356,003
Interest paid..........................................................
9,476,709
3,616,907
Amortization.......................................................... 933,025
306,899
Depreciation..........................................................
10,797,837
3,928,366
Depletion..........................................................
*4,630
*3,269
Advertising..........................................................
12,975,664
2,578,975
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
1,916,818
1,151,040
Employee benefit programs..........................................................
4,759,665
1,861,094
Net loss, noncapital assets..........................................................
153,668
71,699
Other deductions..........................................................
68,023,485
25,627,538

60,172,358
52,197,162
1,030,858
2,575,808
183,430
90,623
452,824
426,002
247,224
49,053
307,109
-228,183

46,345,521
35,106,734
1,408,959
3,350,572
200,771
109,761
516,218
579,909
465,800
16,061
629,025
157
222,984

388,495,251
315,916,771
8,636,391
21,568,124
1,389,168
754,340
4,022,826
5,350,092
2,903,883
241,785
2,992,232
*3,112
2,127,808

704,848,603
533,768,019
12,689,550
55,719,970
3,960,894
899,253
16,944,014
11,248,358
5,821,161
621,327
6,834,639
*1,361
10,377,818

31,400,407
22,974,346
859,655
2,911,768
205,083
86,884
581,648
599,832
384,352
11,119
322,688
1,297
328,119

9,670,625
6,405,270
242,471
1,140,457
64,333
11,890
461,401
202,452
79,199
8,854
87,310
-198,605

85,966
170,516
*135
2,127,465

182,564
267,166
3,119
3,285,719

882,509
1,423,412
68,445
20,214,354

764,212
2,890,724
81,934
42,225,371

80,726
173,078
*170
1,879,644

14,437
44,062
325
709,560

873,857

1,875,539

10,361,344

10,442,793

778,517

73,599

870,898
1,058,503
187,606

1,867,116
2,183,599
316,484

10,298,725
12,929,387
2,630,662

10,366,647
16,935,894
6,569,247

777,112
1,076,024
298,912

72,595
277,224
204,629

168,409
6,819
63,464
*13,755

358,593
9,091
94,301
508

3,041,098
86,834
664,365
86,311

2,461,589
68,753
945,913
13,346

118,998
9,242
79,640
*242

15,395
*1,656
13,282
--

185

*1,552

-3,427

22,027

559

23

83,803
*383

253,058
*84

2,203,278
3,738

1,409,609
1,942

29,073
*243

*435
--

128,220
141,521
13,301

6,456
10,393
*3,937

11,163
11,653
*490

110,601
119,475
8,875

189,509
226,914
37,405

21,349
24,461
*3,113

3,639
*6,715
*3,076

93,468
103,056
*9,588

*352
*599
*247

59,630
68,863
*9,233

33,486
33,594
*107

75,870
92,135
16,265

*965
*966
*1

----

Total net income (less deficit).......................................................................
29,972,943
16,826,527
Net income..........................................................................
39,008,036
19,600,493
Deficit..........................................................................
9,035,094
2,773,967

1,046,115
1,204,348
158,233

2,296,502
2,581,558
285,056

13,483,910
15,814,587
2,330,677

13,093,615
19,320,215
6,226,600

918,424
1,182,351
263,928

91,630
284,916
193,287

home dealers
(45)

Income from a trade or business:

56

Total receipts less total deductions ¹...........................................................
23,590,197
13,110,740
Net income (less deficit)
from a trade or business.........................................................
23,439,466
13,036,738
Net income..........................................................................
33,187,443
16,171,489
Deficit..........................................................................
9,747,977
3,134,751
Portfolio income (less deficit)
distributed to shareholders.........................................................
6,044,947
3,568,101
Dividend income..........................................................................
173,963
102,744
Interest income..........................................................................
1,774,321
822,129
Royalty income (less loss)..........................................................................
113,919
100,573
Net short-term capital gain
(less loss).......................................................
20,427
-1,690
Net long-term capital gain
(less loss).......................................................
3,956,172
2,540,139
Other portfolio income (net)..........................................................................
6,146
4,205
Real estate rental net income
(less deficit).........................................................
318,741
Net income..........................................................................
369,447
Deficit..........................................................................50,706
Net income (less deficit)
from other rental activity.........................................................
169,789
Net income..........................................................................
195,641
Deficit..........................................................................25,853

56

Footnotes at end of table.

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Wholesale and retail trade--continued
Retail trade--continued

Item

Automotive
dealers

Apparel
and

Furniture
and

Eating
and

Miscellaneous

stores

and
service
stations

accessory
stores

home
furnishing
stores

drinking
places

retail
stores

(46)

Food

Wholesale
and
retail
trade
not
allocable

(47)

(48)

(49)

(50)

(51)

(52)

Number of returns.......................................................................
42,068

53,787

20,242

20,637

124,659

120,815

1,251

Number of shareholders............................................
77,028

96,107

36,745

35,933

250,615

222,420

2,304

Total receipts ¹......................................................................
76,023,377
370,947,830
Business receipts..........................................................
75,004,205
365,585,568
Interest on Government obligations:
State and local...............................................................................
11,904
24,851
Net gain, noncapital assets..........................................................
46,526
221,884
Other receipts..........................................................
960,742
5,115,526

13,704,405
13,548,193

24,700,840
24,280,655

79,191,956
78,248,033

108,799,839
107,481,141

2,059,471
1,979,677

4,583
1,122
150,507

*5,595
3,870
410,720

3,162
96,783
843,978

23,642
42,926
1,252,131

*583
*127
79,084

Total deductions......................................................................
74,933,529
367,393,577
Cost of goods sold..........................................................
56,339,138
319,892,546
Compensation of officers..........................................................
967,227
3,430,592
Salaries and wages..........................................................
6,732,023
17,034,380
Repairs..........................................................
575,689
962,449
Bad debts..........................................................
56,858
285,120
Rent paid on business property..........................................................
1,689,568
3,380,759
Taxes paid..........................................................1,291,241
3,126,323
Interest paid..........................................................445,581
2,665,746
Amortization.......................................................... 64,548
84,045
Depreciation..........................................................944,571
1,752,915
Depletion..........................................................
--Advertising.......................................................... 771,114
3,441,595
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
124,379
175,397
Employee benefit programs..........................................................
445,195
1,198,162
Net loss, noncapital assets..........................................................
11,983
9,331
Other deductions..........................................................
4,474,414
9,954,217

13,579,897
8,472,324
455,272
1,431,062
65,789
32,999
820,258
286,179
130,514
15,318
143,936
-335,679

23,871,177
15,169,053
679,766
2,646,398
144,450
99,215
1,004,466
513,518
174,237
23,545
264,239
-937,715

78,225,498
32,480,190
2,435,984
14,188,136
1,398,850
70,226
5,495,286
3,392,676
1,024,022
286,288
1,983,529
-2,266,481

105,773,893
72,035,152
3,618,582
9,635,747
544,251
256,061
3,510,627
1,836,138
917,511
127,610
1,335,451
*64
2,098,510

2,022,807
1,470,310
34,816
163,827
6,982
3,051
42,713
23,939
38,641
*4,799
34,833
-18,871

34,962
51,155
*3,468
1,300,982

49,282
120,365
*1,014
2,043,913

44,025
384,106
44,442
12,731,258

241,005
474,601
11,202
9,131,382

*1,567
7,847
*35
170,576

Total receipts less total deductions ¹...........................................................
1,089,848
3,554,253

124,508

829,663

966,459

3,025,946

36,664

119,925
487,303
367,378

824,069
984,182
160,114

963,296
3,094,113
2,130,816

3,002,304
4,581,574
1,579,270

36,081
80,060
*43,979

65,288
1,316
17,729
*5

66,678
8,512
52,893
1,009

654,474
10,162
157,949
*1,160

407,917
12,292
169,817
*10,231

15,258
*2,466
6,279
--

*628

*255

-6,027

6,332

*89

45,610
--

3,653
*357

490,887
*343

209,252
*-7

*6,424
--

45,771
55,987
10,217

*2,933
*3,489
*556

8,098
8,611
*512

45,917
49,243
*3,326

33,675
46,373
12,698

*1,012
*1,012
--

31,507
45,327
13,821

*581
*581
--

*10,132
*10,132
--

*-72
*2,318
*2,390

27,225
27,278
*53

*451
*451
--

Total net income (less deficit).......................................................................
1,637,407
4,213,714
Net income..........................................................................
2,083,285
5,472,309
Deficit..........................................................................
445,878
1,258,595

188,727
545,499
356,771

908,977
1,049,228
140,251

1,663,616
3,735,172
2,071,556

3,471,120
4,967,455
1,496,335

52,801
87,328
*34,527

Income from a trade or business:

Net income (less deficit)
from a trade or business.........................................................
1,077,944
Net income..........................................................................
1,565,783
Deficit..........................................................................
487,839

3,529,401
4,869,691
1,340,290

Portfolio income (less deficit)
distributed to shareholders.........................................................
525,804
607,035
Dividend income..........................................................................
13,909
11,665
Interest income..........................................................................
102,409
352,193
Royalty income (less loss)..........................................................................
30
*669
Net short-term capital gain
(less loss).......................................................
81
20,177
Net long-term capital gain
(less loss).......................................................
409,363
221,337
Other portfolio income (net)..........................................................................
*12
*994
Real estate rental net income
(less deficit).........................................................
28,127
Net income..........................................................................
32,035
Deficit.......................................................................... 3,908
Net income (less deficit)
from other rental activity.........................................................
*5,532
Net income..........................................................................
*5,532
Deficit..........................................................................
--

Footnotes at end of table.

57

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Finance, insurance, and real estate
Holding
Item
Total

(53)

Banking

Credit
agencies

Security,
commodity

other
than

brokers,
and

banks

services

Insurance
agents,
Insurance

brokers,
and

Real
estate

services
(57)

and other
investment
companies,
except bank
holding
companies

(54)

(55)

(56)

(58)

(59)

(60)

Number of returns.......................................................................
356,778

*109

11,642

12,540

--

45,358

264,591

22,538

Number of shareholders............................................
818,106

*191

21,821

21,017

--

71,468

646,801

56,809

Total receipts ¹......................................................................
87,396,401 *151,493
Business receipts..........................................................
80,733,584 *151,398
Interest on Government obligations:
State and local...............................................................................
167,411
-Net gain, noncapital assets..........................................................
308,594
-Other receipts..........................................................
6,186,812
*95

5,717,632
4,572,225

10,284,850
9,070,451

---

16,803,846
16,254,395

51,464,028
48,746,129

2,974,552
1,938,986

*2,396
56,448
1,086,563

47,564
38,929
1,127,906

----

9,855
6,077
533,519

50,120
205,046
2,462,733

57,476
2,094
975,997

Total deductions......................................................................
80,661,402 *104,535
Cost of goods sold..........................................................
24,209,800
-Compensation of officers..........................................................
8,326,340
*9,720
Salaries and wages..........................................................
12,740,324
*23,823
Repairs..........................................................
614,311
*1,273
Bad debts.......................................................... 658,377
*756
Rent paid on business property..........................................................
2,263,056
*8,843
Taxes paid..........................................................2,366,360
*3,777
Interest paid..........................................................
3,305,782
*5,849
Amortization..........................................................225,749
*29
Depreciation..........................................................
1,107,540
*1,302
Depletion..........................................................
*2,177
-Advertising..........................................................1,385,617
*4,925
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
491,089
*187
Employee benefit programs..........................................................
661,122
-Net loss, noncapital assets..........................................................
81,956
*237
Other deductions..........................................................
22,221,801
*43,814

5,220,061
-497,085
1,215,854
30,088
270,945
178,458
190,434
931,005
34,234
73,783
*9
118,063

9,263,327
-2,218,649
2,209,760
36,171
28,335
269,913
332,183
441,669
7,768
97,280
-90,800

--------------

14,962,328
2,450,210
2,380,136
3,419,465
107,109
61,645
640,645
531,503
170,326
70,025
196,979
*25
305,184

48,300,699
21,449,813
2,881,553
5,352,289
429,927
285,759
1,118,652
1,240,969
1,595,221
105,090
690,325
*2,117
856,932

2,810,452
309,776
339,197
519,132
9,744
10,937
46,545
67,495
161,713
8,603
47,871
*26
9,713

24,783
46,070
21,256
1,587,993

91,131
75,933
*6,581
3,357,155

-----

164,808
199,608
*278
4,264,382

187,584
312,874
52,854
11,738,739

22,597
26,636
*750
1,229,719

497,571

1,021,523

--

1,841,518

3,163,329

164,100

495,175
1,046,874
551,699

973,959
2,030,581
1,056,622

----

1,831,663
2,113,573
281,910

3,113,209
6,087,891
2,974,682

106,624
1,253,406
1,146,782

401,669
6,267
223,384
*97

1,903,050
55,371
363,415
*219

-----

283,376
25,244
163,796
*3

2,130,144
78,027
1,173,445
6,793

1,828,847
324,613
500,134
131,015

31,087

589,734

--

2,464

96,170

218,664

133,849
*6,984

880,621
13,690

---

88,603
*3,265

740,175
35,535

636,059
18,362

*524
*524
--

1,769
7,952
6,183

666
*2,432
*1,766

----

3,175
*7,827
*4,653

1,852,127
3,436,361
1,584,235

33,141
63,607
30,465

----

4,103
*7,189
*3,086

*651
*651
--

----

*2,836
*2,836
--

86,010
102,362
16,352

-11,104
4,213
*15,317

902,716
1,336,250
433,534

2,878,326
3,387,687
509,360

----

2,121,049
2,344,264
223,215

7,181,490
10,944,434
3,762,944

1,957,509
2,913,058
955,550

Income from a trade or business:

58

Total receipts less total deductions ¹...........................................................
6,734,999
*46,958
Net income (less deficit)
from a trade or business.........................................................
6,567,588
Net income..........................................................................
12,580,546
Deficit..........................................................................
6,012,958

*46,958
*48,221
*1,263

Portfolio income (less deficit)
distributed to shareholders.........................................................
6,547,374
*288
Dividend income..........................................................................
489,522
-Interest income..........................................................................
2,424,462
*288
Royalty income (less loss)..........................................................................
138,126
-Net short-term capital gain
(less loss).......................................................
938,120
-Net long-term capital gain
(less loss)....................................................... 2,479,307
-Other portfolio income (net)..........................................................................
77,836
-Real estate rental net income
(less deficit)......................................................... 1,891,402
Net income..........................................................................
3,518,704
Deficit..........................................................................
1,627,301
Net income (less deficit)
from other rental activity.........................................................
82,496
Net income..........................................................................
117,251
Deficit..........................................................................34,755

58

Total net income (less deficit).......................................................................
15,088,860
*47,770
Net income..........................................................................
20,974,039
*48,346
Deficit..........................................................................
5,885,179
*576
Footnotes at end of table.

S Corporation Returns, 1996

Table 1.--All Returns: Total Receipts and Deductions, Portfolio Income, Rental Income, and Total Net
Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Services

Item
Total

(61)

Hotels
and other
lodging
places

Personal
services

Business
services

Auto repair;
miscellaneous
repair
services

Amusement
and
recreation
services

Other
services

Nature of
business
not
allocable

(62)

(63)

(64)

(65)

(66)

(67)

(68)

Number of returns.......................................................................
815,494

19,028

56,819

246,698

76,990

64,908

351,051

3,046

Number of shareholders............................................
1,396,554
Income from a trade or business:

53,471

92,025

414,113

125,753

122,714

588,479

7,745

Total receipts ¹......................................................................
406,198,180
14,542,838
Business receipts..........................................................
394,464,342
14,193,664
Interest on Government obligations:
State and local...............................................................................
96,956
5,524
Net gain, noncapital assets..........................................................
1,552,551
35,115
Other receipts..........................................................
10,084,330
308,534

20,008,363
19,702,077

140,563,918
136,284,538

34,696,195
33,996,010

32,003,727
30,593,097

164,383,140
159,694,956

*224,366
*223,435

4,525
52,157
249,604

37,306
569,094
3,672,979

*274
439,374
260,537

12,672
258,257
1,139,701

36,655
198,554
4,452,975

--*932

Total deductions......................................................................
382,182,139
14,332,178
Cost of goods sold..........................................................
124,077,272
2,196,358
Compensation of officers..........................................................
38,334,545
312,147
Salaries and wages..........................................................
75,804,660
2,863,875
Repairs.......................................................... 3,870,644
521,935
Bad debts.......................................................... 990,137
14,596
Rent paid on business property..........................................................
16,144,570
1,027,825
Taxes paid..........................................................
14,773,146
897,623
Interest paid..........................................................
5,561,358
1,035,371
Amortization..........................................................
1,173,282
48,257
Depreciation..........................................................
10,582,342
959,097
Depletion..........................................................
*1,816
-Advertising..........................................................
5,237,956
407,607
Pension, profit-sharing, stock
bonus, and annuity plans......................................................
2,929,765
10,141
Employee benefit programs..........................................................
4,155,637
126,288
Net loss, noncapital assets..........................................................
128,316
20,100
Other deductions..........................................................
78,416,693
3,890,958

19,088,003
6,572,814
1,301,038
3,593,779
278,426
65,601
1,629,301
857,121
232,233
60,450
523,376
*725
498,566

132,281,750
54,006,762
10,499,160
25,528,429
907,650
326,240
3,613,374
4,631,172
1,269,480
218,960
3,147,570
*41
1,641,343

33,484,557
16,581,571
1,882,955
4,126,546
347,365
62,669
1,578,779
1,206,027
644,902
43,278
1,907,952
-482,461

30,787,874
7,848,643
2,629,699
5,053,922
692,325
65,904
1,761,570
1,309,331
777,352
575,161
1,575,500
*133
720,141

152,207,777
36,871,124
21,709,546
34,638,109
1,122,942
455,126
6,533,722
5,871,872
1,602,021
227,175
2,468,847
*917
1,487,837

224,729
*153,484
*13,786
*10,033
*327
*2,607
*7,530
*1,680
*1
-*1,185
-*1,706

58,149
173,412
*20,225
3,222,784

730,899
1,372,441
18,026
24,370,202

53,964
271,918
23,854
4,270,315

97,499
205,116
12,919
7,462,659

1,979,113
2,006,461
33,190
35,199,775

*1,103
*137
*2,134
*29,017

920,360

8,282,168

1,211,638

1,215,852

12,175,363

-363

915,835
1,348,643
432,808

8,244,861
11,263,582
3,018,721

1,211,364
1,779,379
568,015

1,203,181
3,088,966
1,885,785

12,138,708
15,523,427
3,384,719

-363
*18,440
*18,803

332,434
6,426
48,802
2,687

2,783,792
68,834
601,373
44,653

68,931
3,493
54,066
382

1,622,686
19,307
233,526
76,610

1,673,843
62,682
500,206
42,323

*1,150
-*1,150
--

869

63,417

*330

17,791

142,544

--

272,357
*1,293

1,997,035
8,480

10,660
--

1,275,247
*204

925,719
*368

---

Total receipts less total deductions ¹...........................................................
24,016,041
210,660
Net income (less deficit)
from a trade or business.........................................................
23,919,085
Net income..........................................................................
33,973,434
Deficit..........................................................................
10,054,350

205,135
969,436
764,301

Portfolio income (less deficit)
distributed to shareholders.........................................................
6,662,405
180,720
Dividend income..........................................................................
169,157
8,416
Interest income..........................................................................
1,582,420
144,447
Royalty income (less loss)..........................................................................
171,513
*4,858
Net short-term capital gain
(less loss).......................................................
222,282
-2,670
Net long-term capital gain
(less loss)....................................................... 4,505,321
24,301
Other portfolio income (net)..........................................................................
11,713
*1,368
Real estate rental net income
(less deficit)......................................................... 315,460
Net income..........................................................................
407,311
Deficit..........................................................................
91,850

72,021
82,883
10,861

22,483
22,915
*432

61,289
103,273
41,984

28,161
34,577
*6,416

35,690
41,785
*6,095

95,816
121,878
26,062

*418
*418
--

Net income (less deficit)
from other rental activity.........................................................
216,640
Net income..........................................................................
397,339
Deficit..........................................................................
180,699

*350
*402
*52

*351
*372
*21

165,830
289,039
123,209

16,577
60,126
*43,549

-5,608
5,771
*11,378

39,139
41,628
*2,489

----

Total net income (less deficit).......................................................................
31,113,590
458,227
Net income..........................................................................
40,313,108
1,156,392
Deficit..........................................................................
9,199,517
698,165

1,271,104
1,682,126
411,022

11,255,773
13,972,146
2,716,373

1,325,033
1,909,341
584,309

2,855,949
4,585,897
1,729,949

13,947,505
17,007,204
3,059,699

1,204
*20,007
*18,803

* Estimate should be used with caution because of the small number of sample returns on which it is based.
** Data deleted to avoid disclosure of information for specific corporations. Deleted data are included in the appropriate totals.
¹ Includes interest on Government obligations: State and local, which is not reflected in net income (less deficit) from a trade or business.
² Less than $500.
NOTE: Detail may not add to total due to rounding.

59

S Corporation Returns, 1996

Table 2.--Returns With Net Income: Total Receipts and Deductions, Portfolio Income, Rental Income,
and Total Net Income, by Major Industrial Group
[All figures are estimates based on samples--money amounts are in thousands of dollars]

Mining

Item

All

Agriculture,

industries

forestry,
and fishing

(1)

(2)

Oil
Total

Metal

Coal

and

mining

mining

gas

Nonmetallic
minerals,

extraction

except fuels

(3)

(4)

(5)

(6)

(7)

Number of returns.....................................................................................
1,426,650
47,591

9,336

*514

334

6,961

1,527

Number of shareholders......................................................................
2,731,324
119,118

20,574

*928

1,531

14,975

3,140

36,113,312

12,354,480

*228,650

3,367,796

5,896,236

2,861,798

Business receipts....................................................................
2,104,394,833
34,529,081
Interest on Government obligations:
State and local............................................................................
625,048
13,079
Net gain, noncapital assets....................................................................
4,725,665
155,904
Other receipts....................................................................
33,142,436
1,415,247
Total deductions......................................................................
2,012,406,301
33,292,278

11,352,040

*155,594

3,314,209

5,055,560

2,826,676

9,225
197,339
795,876
10,258,744

*46
*32,481
*40,528
*160,917

*705
13,977
38,904
3,210,463

5,773
145,377
689,525
4,313,604

*2,700
5,503
26,919
2,573,760

Cost of goods sold....................................................................
1,378,184,052
19,266,133
5,092,753
Compensation of officers....................................................................
81,813,344
996,952
294,582
Salaries and wages....................................................................
177,414,977
2,539,592
863,117
Repairs....................................................................
12,378,172
736,076
229,873
Bad debts....................................................................
3,448,176
18,514
19,246
Rent paid on business property....................................................................
38,953,242
1,113,274
131,066
Taxes paid....................................................................
41,793,990
671,110
454,421
Interest paid....................................................................
18,455,255
563,269
273,876
Amortization....................................................................
2,131,359
11,733
25,801
Depreciation....................................................................
31,502,214
1,262,169
601,815
Depletion....................................................................
162,883
*3,367
115,644
Advertising....................................................................
18,963,349
103,992
14,541
Pension, profit-sharing, stock
bonus, and annuity plans............................................................................
7,234,493
52,152
46,723
Employee benefit programs....................................................................
14,077,379
146,964
244,530
Net loss, noncapital assets....................................................................
189,541
*7,216
*1,501
Other deductions....................................................................
185,703,875
5,799,764
1,849,255
Total receipts less total deductions ¹......................................................................
130,481,680
2,821,034
2,095,736

*69,780
*1,428
*1,372
*19,976
*146
*3,719
*9,622
*2,587
-*7,682
*3,103
*1

1,706,187
31,277
222,627
67,444
*4,248
61,289
137,064
81,949
*11,272
150,909
*37,143
1,195

1,694,354
167,299
497,460
88,207
10,406
49,246
222,431
137,074
10,646
251,329
*16,371
6,887

1,622,432
94,578
141,658
54,246
4,447
16,813
85,304
52,265
3,883
191,895
59,027
6,459

*1,653
*2,328
-*37,522
*67,733

*8,767
186,266
*6
502,820
157,333

15,397
38,009
*924
1,107,565
1,582,632

20,907
17,926
*571
201,349
288,038

Income from a trade or business:
Total receipts ¹......................................................................
2,142,887,981

60

Net income (less deficit)
from a trade or business....................................................................
129,856,632
2,807,954

2,086,511

*67,687

156,628

1,576,859

285,338

Net income....................................................................
132,473,979
Deficit....................................................................2,617,347
Portfolio income (less deficit)

2,848,573
40,619

2,111,574
25,063

*67,687
--

161,868
*5,240

1,593,570
16,711

288,450
*3,112

distributed to shareholders....................................................................
27,128,263
327,128

517,495

*2,274

30,852

455,130

29,239

Dividend income......................................................................
1,056,191
13,938
Interest income......................................................................
7,720,540
184,905
Royalty income (less loss)......................................................................
643,344
9,837
Net short-term capital gain
(less loss)....................................................................................
1,254,731
-1,535
Net long-term capital gain
(less loss)....................................................................................
16,341,413
118,952
Other portfolio income (net)......................................................................
112,044
*1,029
Real estate rental net income

37,254
126,684
89,798

-*2,274
--

*2,511
15,361
*2,775

30,950
88,108
87,023

3,793
20,941
--

21,033

--

*3,460

17,286

*287

242,452
*273

---

*6,746
--

231,546
*217

4,160
*57

(less deficit)....................................................................
4,156,690

73,937

12,654

*28

*1,600

9,872

1,153

Net income......................................................................
4,412,759
Deficit...................................................................... 256,069
Net income (less deficit)

77,180
3,243

13,075
*421

*28
--

*1,715
*115

10,069
*197

1,263
*110

from other rental activity....................................................................
754,794
21,638

17,806

--

*5,125

*2,348

*10,333

18,617
*811
2,634,466

--*69,989

*5,125
-194,205

*3,160
*811
2,044,209

*10,333
-326,063

Net income......................................................................
801,903
Deficit...................................................................... 47,109
Total net income.......................................................................
161,896,380

60

Footnotes at end of table.

21,910
*272
3,230,657

S Corporation Returns, 1996

Table 2.--Returns With Net Income: Total Receipts and Deductions, Portfolio Income, Rental Income,
and Total Net Income, by Major Industrial Group--Continued
[All figures are estimates based on samples--money amounts are in thousands of dollars]
Construction

Manufacturing

General
building
Item
Total

contractors

Heavy

Special

and

construction

trade

operative

contractors

contractors

(10)

(11)

Total

Food and

Tobacco

kindred

manufac-

Textile
mill

products

tures

products

(13)

(14)

builders

(8)

(9)

(12)

(15)

Number of returns.....................................................................................
164,878
59,309

5,050

100,519

89,675

5,371

3

2,198

Number of shareholders......................................................................
269,192
94,740

10,047

164,405

217,506

23,912

14

5,172

Income from a trade or business:
Total receipts ¹......................................................................
231,398,271 103,106,675

24,080,004

104,211,592

375,883,088

50,421,083

235,219

14,354,474

Business receipts....................................................................
229,520,492 102,271,942
Interest on Government obligations:
State and local............................................................................
64,229
35,218
Net gain, noncapital assets....................................................................
227,366
64,937
Other receipts....................................................................
1,586,183
734,578
Total deductions......................................................................
217,961,145
98,400,284

23,750,876

103,497,674

371,838,473

49,785,242

234,831

14,310,319

13,461
89,886
225,781
22,726,128

15,550
72,543
625,824
96,834,734

151,962
1,081,466
2,811,186
347,083,232

8,006
213,063
414,772
47,656,825

-10
378
202,784

3,258
4,091
36,805
13,632,689

Cost of goods sold....................................................................
171,857,069
85,794,520
17,968,563
Compensation of officers....................................................................
7,785,467
2,284,041
720,586
Salaries and wages..............

[Text truncated at 120,000 characters. The full text is on the page linked above.]

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A6cacabf632944137. Public record. Not legal advice.