S Corporation Returns, 1998

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by Susan Wittman

ata for Tax Year 1998 show a continuation

in the growth of S corporations that was

affected by four legislative acts: the Tax

Reform Act of 1986, the Revenue Reconciliation Act

of 1990, the Revenue Reconciliation Act of 1993, and

the Small Business Job Protection Act of 1996 [1].

The total number of S corporation filings grew by

over 5.5 percent to nearly 2.6 million, up from nearly

2.5 million for Tax Year 1997. S corporations

continue to be the single largest corporate entity type

filing a Form 1120 series U. S. Tax Return for a

Corporation, with over 53.4 percent of all corporations filing a Form 1120S (Figure A). The average

annual growth since 1986, the year in which the first

of four major tax reform acts affected S corporations, is 10.3 percent. Over the same period, all other

corporations have experienced an average annual

decline of 1.1 percent [2].

NorthAmericanIndustryClassificationSystem

In 1993, the United States, Canada, and Mexico

entered into a trade agreement known as the North

American Free Trade Agreement (NAFTA), the

goal of which was to eliminate trade barriers and

trade tariffs within the continent for the three participants. The desired economic effect of this trade

agreement was to reduce costs and thus improve

economic efficiency. Each signatory had established

government agencies that produced and tracked

economic performance and had a system that

classified economic data by some industry classification measure. These countries agreed that a

consistent and common system was needed to

properly measure economic performance and track

the impact of NAFTA on each participating country.

The resulting system is known as the North

American Industry Classification System (NAICS).

This classification system has defined itself as “a

comprehensive system covering the entire field of

economic activities, producing and nonproducing [3].”

The system allows for improved industry comparability among the three participating countries, and additionally is more compatible with the existing two-digit

level of the International Standard Industrial Classifi-

Susan Wittman is an economist with the Corporation

Special Projects Section. This article was prepared

under the direction of Doug Shearer, Chief.

cation (ISIC Rev.3) of the United Nations. The

NAICS system is based on grouping together, in one

industry, economic units that have similar production

processes; i.e., the system is production-oriented.

The NAICS system has twenty sectors. Each

industry within these sectors is grouped by its individual production criterion. While the structure of

NAICS does not explicitly reflect a distinction of

goods versus services, there are five mostly goodsproducing sectors, and the remaining fifteen are

service-producing sectors. The Internal Revenue

Service and the Statistics of Income Division have

based their industry classification systems largely on

the NAICS system with some modifications. Statistics of Income publishes corporate data on four

levels: division, sector, major, and minor code. Data

presented in this article are generally shown by

division, the highest level in the classification system,

and then by sector, the secondary level. The ten

divisions and their sectors are:

raw materials and energy production, which

includes agriculture, forestry, fishing, and

hunting, mining, and utilities;

goods production, which includes construction

and manufacturing;

distribution and transportation of goods, which

includes wholesale trade, retail trade, and

transportation and warehousing;

information;

finance, insurance, real estate, and rental and

leasing;

professional and business services, which

includes professional, scientific, and technical

services, management companies and enterprises, and administrative and support, and

waste management and remediation services;

education, health and social services, which

includes education and health and social assistance;

leisure, accommodation, and food service, which

includes arts, entertainment, and recreation, and

accommodation and food services;

S Corporation Returns, 1998

Figure A

Form 1120 Series Returns by Percentage of Filings, Tax Years 1986-1998

Percentage of filings

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

Tax year

S corporations

other services;

nature of business not allocable.

For information on lower-level groupings (major

groups and minor industries), see Internal Revenue

Service, Statistics of Income--Corporation Source

Book, Publication 1053.

The prior industry classification system was

known as the Standard Industrial Classification system, and was developed in the late 1930’s by the

United States. Over the course of the twentieth

century, the American economy underwent a significant shift from a goods-producing economy to a

service-producing one. As the economy shifted, new

industries emerged. An industry classification system

overhaul was needed to account for shifts in the

economy. NAICS was designed to accommodate

these shifts.

S corporation data for Tax Year 1998 are being

classified and presented for the first time under this

NAICS-based industry classification system. The

new industry classifications allow for greater detail

All other corporations

and the presentation of recently emerged industries,

such as in the Information division, which was not

distinguished in prior years. At the same time, the

new industry classifications do present a problem for

longitudinal analysis by industry. Therefore, industry

data presented cannot readily be compared to prior

years, and such comparisons will not be attempted in

this article as the foundations of the classification

system have dramatically changed under this new

system. For example, in Tax Year 1997, three industrial divisions (services; wholesale and retail trade;

and finance, insurance, and real estate) accounted for

nearly three-quarters of all S corporations. For Tax

Year 1998, the top three industrial divisions (distribution and transportation of goods; professional and

business services; and goods production) account for

less than 59 percent of all S corporations.

SCorporationBasics

An S corporation is an incorporated entity that retains

the main attributes of the traditional C corporation,

such as limited liability, freely transferable ownership,

S Corporation Returns, 1998

and unlimited life span, but, in exchange for certain

limitations, receives the benefits of a flow-through

entity for income tax purposes. The election to be

treated as an S corporation allows income and

expenses to pass through the corporate structure to

its shareholders, and any resulting tax liability is the

responsibility of the shareholders. This benefit

eliminates the double taxation on the corporation’s

net income or capital gains. This is unlike a taxable

corporation which incurs a tax liability at the corporate level on its net income and capital gains, and

then again, when profits are distributed to shareholders in the form of dividends, a second tax liability is

incurred on those dividends. The elimination of

double taxation can result in substantial tax savings

for a corporation that is eligible to make a Subchapter

S election. The tax benefits of an S election are

valuable for profitable corporations as well as corporations that report net losses, as the losses flow

through to the individual shareholders and can

potentially offset net income from other sources.

To elect treatment under Subchapter S, an eligible corporation must meet all criteria for an election

and file Form 2553, Election by a Small Business

Corporation, with the IRS Submission Processing

Center where the corporation files its Federal tax

forms. All qualified shareholders of the corporation

must consent to the election on Form 2553, and all

eligibility requirements must be met prior to the election [4]. The criteria for Tax Year 1998 were that

the corporation:

be a domestic corporation (an unincorporated

association, that is treated as a corporation

under Code Section 7701, may elect treatment

as an S corporation);

have no more than 75 shareholders (a husband

and wife (and their estates) are counted as one

shareholder for this requirement);

have only individuals, estates, certain trusts, and

exempt organizations as shareholders [5];

have no nonresident alien shareholders; and

have only one class of stock.

Ineligible corporations were:

affiliated group members eligible for inclusion on

a consolidated return;

insurance companies subject to provisions of

Subchapter L of the Internal Revenue Code;

Interest-Charge Domestic International Sales

Corporations (IC-DISC's) or former Domestic

International Sales Corporations (DISC's);

corporations eligible to elect the possessions tax

credit; and

banks or thrift institutions that use the reserve

method of accounting for bad debts under

Internal Revenue Code section 585.

Form 1120S, U.S. Tax Return for an S Corporation, must be filed before the 15th day of the 3rd

month following the close of the tax year. The tax

year for an S corporation generally must be a calendar year. While provisions exist for an exemption

from the calendar year rule, for Tax Year 1998, over

90.0 percent of all S corporations filed a calendar

year return [6].

ComparisonsofPass-ThroughEntities

Over the past few years, S corporations have been

compared to other pass-through entity choices by tax

professionals to determine which pass-through entity

choice provides the most benefit. The focus of this

debate has centered on the S corporation election or

the limited liability company (LLC). The limited

liability company is a hybrid entity combining partnership and corporate characteristics and has

advantages over the S corporation election, as there

is no limit on the number of owners, and it

allows corporate or foreign ownership. Conversely,

S corporations are limited to a maximum of 75

shareholders that must be individuals, estates, certain

trusts, or exempt organizations but cannot have a

nonresident alien shareholder. Additionally, an

eligible corporation must be domestic and may have

only one class of stock. Despite the advantages of

the LLC entity classification, LLC's are generally

subject to provisions under subchapter K of the

Internal Revenue Code that govern partnerships.

This subchapter of the Code is considered by many

tax professionals to be complex. Subchapter S of the

Internal Revenue Code, however, generally governs

S corporations. The simplicity of subchapter S is

S Corporation Returns, 1998

considered by many to be an advantage for the small

business owner who wants the liability protection of a

corporation coupled with one level of tax, as a passthrough entity, without the cumbersome provisions of

subchapter K. Shareholders of S corporations may

also benefit from lower employment taxes. Wages

they receive from the firm are subject to FICA taxes,

but profits are generally not subject to self-employment taxes. Active members of unincorporated

entities, like LLC's, can be liable for these taxes on

their pass-through income, however.

Some tax professionals have speculated that, as a

pass-through entity choice, S corporation elections

will decline in popularity. This speculation is not

supported by the data as S corporation return filings

continued to increase for Tax Year 1998. More than

310.2 thousand corporations elected subchapter S

status for the first time during Tax Year 1998, which

includes over 241.2 thousand newly incorporated

businesses electing subchapter S treatment out of a

total population of nearly 2.6 million. The remaining

68.9 thousand corporations were added to the S

corporation population as taxable corporations converted to S corporation status during Tax Year 1998.

These statistics are comparable with those for Tax

Year 1997 when nearly 2.5 million returns were filed,

including 320.8 thousand corporations that elected

subchapter S status for the first time in 1997. Of this

group, nearly 227.4 thousand newly incorporated

businesses elected S corporation status for the first

time, and 93.4 thousand converted from taxable

corporations to S corporation status. Overall, these

statistics show continued increases in the number of

businesses electing S corporation status, even though

there is a slight decline in the rate of growth from

Tax Year 1997 compared with Tax Year 1998.

As further evidence of the continued popularity

of S corporations as an entity choice, they now comprise 53.4 percent of all Form 1120 series returns

filed for Tax Year 1998, up from 52.1 percent for

Tax Year 1997. Thus, they continue to be the single

most popular corporate entity choice of the Form

1120 series returns.

As previously reported in the Statistics of Income Bulletin, there were nearly 1.9 million partnership returns filed for Tax Year 1998 [7]. Included in

this figure are 470.7 thousand limited liability company returns, which is an increase of more than 34.8

percent over Tax Year 1997. While the increase in

filings of these returns continues, there is a decline in

the rate of growth as shown in Figure B. The increase in the number of partnership filings is attributed to limited liability companies as well as limited

partnerships. While these two entity choices have

experienced increases, general partnerships have

been on the decline [8]. These statistics do not

include limited liability companies that have filed a

Form 1120 or that file as a sole proprietorship a Form

1040 Schedule C.

The statistics on S corporation elections and

partnership filings do not yet indicate a dramatic shift

away from subchapter S elections to other passthrough entity choices.

Subsidiaries

Tax Year 1998 was the second year that S corporations were allowed to own 100 percent of the stock

of an eligible S corporation and elect to treat the

Figure B

Limited Liability Companies Filing on Form 1065 and Form 1065B for Tax Years 1993-1998

[All figures are estimates based on samples]

Tax year

Total

Total partnership

Total number

Total limited

Percent

number of

percent

of limited

liability companies

of limited liability

partnership

change

liability

percent change

companies

returns

(1)

from prior year

(2)

companies

(3)

from prior year

(4)

to total

(5)

1993.................................................................................................

1,467,567

1994.................................................................................................

1,493,963

1995.................................................................................................

1,580,900

-1.8

5.8

17,335

47,816

118,559

-175.8

147.9

1.2

3.2

7.5

1996.................................................................................................

1,654,256

1997.................................................................................................

1,758,627

4.6

6.3

221,498

349,054

86.8

57.6

13.4

19.8

1998.................................................................................................

1,855,348

5.5

470,657

34.8

25.4

NOTE: Includes Limited Liability Companies filing on Form 1065, U.S. Partnership Return of Income and Form 1065B, U.S. Return of Income for Electing Large Partnerships.

S Corporation Returns, 1998

subsidiary owned as a “qualified subchapter S

subsidiary” or QSUB [9]. Tax Year 1997 was the

first year statistics were published on such data and

just over 1,900 S corporations reported a QSUB

election for eligible subsidiaries. These corporations

also reported total assets of $53.7 billion and total net

income (less deficit) of $2.5 billion. For Tax Year

1998, nearly 3,100 S corporations reported such an

election, a 61.7-percent increase over the prior

period. Total assets reported by these S corporations

were $109.3 billion, and total net income (less deficit)

was $5.6 billion for Tax Year 1998. Many of the S

corporations that made an election to treat a subsidiary as a qualified subsidiary made the election for

multiple subsidiaries owned. Figure C shows the

number of S corporations reporting a QSUB election,

total assets, and total net income (less deficit) by

industrial division for Tax Year 1998.

FinancialDataHighlights

Figure D displays total net income (less deficit) for

each industrial sector. Total net income (less deficit)

for S corporations includes net income (less deficit)

from 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 [10].

Table 1 presents data for all S corporations and

then groups the data by industry divisions and by

industry sectors. Total net income (less deficit)

increased to $181.8 billion for Tax Year 1998, an

18.8-percent increase over the $153.1 billion reported

for Tax Year 1997. Net income (less deficit) from a

trade or business comprises the single largest component of total net income (less deficit). Despite the

reported increase for this item, this component of

total net income (less deficit) declined slightly as it

accounted for 68.7 percent of total net income (less

deficit), as compared to Tax Year 1997 when it

accounted for 73.0 percent of total net income (less

deficit). The slight decline as a percentage of total

net income (less deficit) is due to an increase in

portfolio income (less deficit). Portfolio income (less

deficit) consists of dividend income, interest income,

royalty income, net short-term capital gain (less loss),

net long-term capital gain (less loss), and other portfolio income (less loss). These items increased by

39.9 percent for Tax Year 1998. The Taxpayer

Relief Act of 1997 reduced the tax rates on net longterm capital gains, and the impact of those lower

rates can be seen in the increases reported for net

long-term capital gains (less loss) [11]. For Tax

Year 1997, S corporations reported net long-term

capital gain (less loss) totaling $23.5 billion, an increase of 43.4 percent over the prior year. For Tax

Year 1998, net long-term gain (less loss) was nearly

$38.0 billion, an increase of 61.5 percent over Tax

Year 1997.

Figure C

S Corporation Filings with Qualified Subchapter S Subsidiaries, by Industrial Division, Tax Year 1998

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Industrial division

Number of

Total

Total net income

returns

assets

(less deficit)

(1)

(2)

All industries…………….............................................................................................................................3,073

(3)

5,624,562

Raw materials and energy production.............................................................................................................................

3,514,770

67,255

Goods production…………….............................................................................................................................528

24,893,864

2,005,525

Distribution and transportation of goods.............................................................................................................................

821

13,591,363

851,969

Information……………………..............................................................................................................................288

5,516,123

551,601

Finance, insurance, real estate, and rental and leasing.............................................................................................................................

283

22,278,130

1,049,089

Professional and business services.............................................................................................................................

823

Education, health, and social assistance.............................................................................................................................

36,860,754

846,695

385,110

8,489

Leisure, accommodation, and food services.............................................................................................................................

163

1,934,455

243,939

Other services…………………...............................................................................................................................

*51

*308,082

*15,504

* Estimate should be used with caution because of the small number of returns on which it is based.

NOTE: Detail may not add to totals because of rounding.

109,282,651

S Corporation Returns, 1998

Figure D

S Corporations: Total Net Income (Less Deficit), by Industrial Sector, Tax Year 1998

[All figures are estimates based on samples--money amounts are in thousands of dollars]

All

Item

Industries

(1)

Agriculture,

forestry,

Mining

fishing, and

hunting

(2)

Utilities

(3)

(4)

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

181,788,303

1,034,457

2,416,272

Net income (less deficit) from a trade or business......................................................................

124,859,425

297,381

1,167,921

Portfolio income (less deficit) distributed to shareholders......................................................................

51,465,087

556,411

1,231,779

Dividend income...................................................................... 1,612,865

26,011

71,014

Interest income...................................................................... 10,629,968

249,430

202,279

Royalty income...................................................................... 619,003

25,284

90,850

Net short-term capital gain (less loss)......................................................................

507,233

-5,654

1,764

Net long-term capital gain (less loss)......................................................................

37,953,826

253,487

864,972

Other portfolio income (net)......................................................................

142,192

7,852

900

Real estate rental net income (less deficit)......................................................................

4,546,215

157,285

11,305

Net income (less deficit) from other rental activity......................................................................

917,576

23,380

5,267

Item

513,875

102,254

412,250

869

52,645

--192

358,929

-*-786

*157

Wholesale and

retail trade

Wholesale

trade

Retail

trade

Wholesale

and

retail trade

(7)

(8)

(9)

not allocable

(10)

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

38,203,962

20,283,199

17,905,559

Net income (less deficit) from a trade or business......................................................................

29,540,808

15,984,289

13,546,101

Portfolio income (less deficit) distributed to shareholders......................................................................

8,163,305

4,064,069

4,095,128

Dividend income...................................................................... 213,780

112,682

101,065

Interest income...................................................................... 1,930,422

902,220

1,024,559

Royalty income...................................................................... 134,616

86,968

47,649

Net short-term capital gain (less loss)......................................................................

23,495

-2,447

25,801

Net long-term capital gain (less loss)......................................................................

5,851,870

2,958,359

2,893,221

Other portfolio income (net)......................................................................

9,121

6,287

2,834

Real estate rental net income (less deficit)......................................................................

357,099

159,513

196,838

Net income (less deficit) from other rental activity......................................................................

142,750

75,329

67,491

Item

Manufacturing

(5)

(6)

21,257,116

18,136,701

2,915,819

121,778

1,267,598

5,758

49,328

1,463,443

7,913

175,529

29,067

35,567,911

27,556,943

7,799,415

183,232

1,349,308

68,151

-11,260

6,207,247

2,737

137,236

74,317

Transportation

and warehousing

Information

(11)

(12)

15,204

10,418

4,108

3,643

-*142

290

-*748

-70

3,562,340

3,018,368

457,268

25,851

214,523

719

19,957

194,812

1,407

45,021

41,683

5,465,193

2,774,160

2,628,957

65,654

340,512

15,872

-49,504

2,248,352

8,071

53,534

8,542

Administrative

and support

and waste

management

Educational

services

Finance

and

Real estate

and rental

and

Professional,

scientific,

and technical

Management

insurance

leasing

services

companies

(13)

(14)

(15)

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

11,856,976

15,161,193

20,294,093

Net income (less deficit) from a trade or business......................................................................

5,841,795

4,001,462

14,635,028

Portfolio income (less deficit) distributed to shareholders......................................................................

6,003,496

7,252,391

5,598,455

Dividend income...................................................................... 296,915

182,528

134,996

Interest income...................................................................... 1,414,139

1,390,014

745,118

Royalty income......................................................................

7,512

59,055

45,320

Net short-term capital gain (less loss)......................................................................

455,884

74,545

49,918

Net long-term capital gain (less loss)......................................................................

3,781,797

5,513,194

4,622,145

Other portfolio income (net)......................................................................

47,248

33,056

958

Real estate rental net income (less deficit)......................................................................

5,903

3,369,296

64,142

Net income (less deficit) from other rental activity......................................................................

5,782

538,044

-3,532

Construction

(16)

and remediation

services

(17)

(18)

2,685,133

1,420,103

1,285,734

186,578

329,809

1,880

-64,268

829,872

1,863

-20,087

-617

8,138,659

4,130,880

3,993,383

15,913

285,422

*36,335

-21,074

3,676,786

6,954

7,442

666,602

556,059

107,522

2,958

44,707

*4,075

-89

55,872

-2,909

111

Health care

and social

Arts,

entertainment,

Accommodation and food

Other

Nature of

business

assistance

(19)

and recreation

(20)

services

(21)

services

(22)

not allocable

(23)

3,624,885

2,811,441

716,127

28,536

350,075

844

4,067

330,689

*1,916

71,257

26,060

3,733,930

2,755,706

926,889

18,140

114,427

*5,799

-2,202

787,083

*3,641

47,229

4,107

-242,709

-364,662

119,165

*1,758

2,341

--427

*115,493

-*2,789

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

5,988,278

1,860,136

Net income (less deficit) from a trade or business..........................................................................................................

5,418,254

1,058,824

Portfolio income (less deficit) distributed to shareholders......................................................................

540,551

756,172

Dividend income..........................................................................................................15,959

20,395

Interest income..........................................................................................................179,858

167,345

Royalty income..........................................................................................................

-116,933

Net short-term capital gain (less loss)..........................................................................................................

-10,360

-6,696

Net long-term capital gain (less loss)..........................................................................................................

355,092

442,692

Other portfolio income (net)..........................................................................................................

15,503

Real estate rental net income (less deficit)..........................................................................................................

25,454

34,144

Net income (less deficit) from other rental activity..........................................................................................................

4,019

10,996

*Estimate should be used with caution because of the small number of sample returns on which it is based.

NOTE: Detail may not add to totals because of rounding.

S Corporation Returns, 1998

Four industrial divisions earned over 86 percent

of total net income (less deficit) for Tax Year 1998.

Goods production, which includes construction and

manufacturing, reported total net income (less deficit)

of $56.8 billion. Distribution and transportation of

goods, which includes wholesale and retail trade and

transportation and warehousing, reported $41.8

billion; professional and business services reported

$31.1 billion, and finance, insurance, real estate, and

rental and leasing reported $27.0 billion.

Table 2 presents data for S corporations that

reported positive total net income, by industrial division and industrial sector. These corporations reported an increase in positive total net income for

Tax Year 1998 of nearly $31.9 billion, a 16.6-percent

increase over Tax Year 1997. Thus, 64.5 percent of

all S corporations reported positive total net income

as compared to 63.4 percent for Tax Year 1997.

Net income (less deficit) from a trade or business

was $166.8 billion, up 10.3 percent from Tax Year

1997 when $151.3 billion were reported. Portfolio

income (less loss) was up 43.0 percent, largely due to

increases in the net long-term capital gain (less loss).

S corporations reported an increase in total

assets of 11.3 percent to nearly $1.5 trillion for Tax

Year 1998 (Table 3). The two largest categories are

net depreciable assets, which accounted for 23.4

percent of total assets, and notes and accounts receivable, which accounted for 21.4 percent of the

total for all S corporations. Overall, asset categories

with the largest percentage increase were investments in government obligations, which had a 49.8percent increase to $26.5 billion; tax-exempt securities, which reported a 36.9-percent increase to $8.1

billion, and other investments, which reported a 24.8percent increase to $138.3 billion. More than 85

percent of the total assets were held in four industrial

divisions (Figure E). Goods production held 28.1

percent, being the largest percentage of total assets,

with $408.3 billion. Distribution and transportation of

goods held 26.8 percent of total assets, with $389.7

billion. Finance, insurance, real estate, and rental and

Figure E

S Corporation Total Assets, by Industrial Division, Tax Year 1998

All other ¹

15%

Goods production

28%

Professional and business

services

12%

$1.5 Trillion

Finance, insurance, real

estate, and rental and

leasing

18%

Distribution and

transportation of goods

27%

¹ All other includes raw materials and energy production; information; education, health, and social assistance; leisure, accommodation, and

food services; other services; and nature of business not allocable.

S Corporation Returns, 1998

leasing held a total of $267.9 billion. The fourth

largest industrial division by size of total assets for

Tax Year 1998 is professional and business services,

which held $171.4 billion in total assets.

shareholders. For Tax Year 1998, there were 715 S

corporations with more than 35 shareholders, which

had 34,319 shareholders. This is up from Tax Year

1997 when 600 corporations with more than 35

shareholders had nearly 25,751 shareholders.

RentalRealEstateNetIncome

Data on rental real estate net income as reported on

Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation, is

shown in Table 4. The number of S corporation

returns reporting Rental Real Estate Income on Form

8825 increased by more than 8.1 percent to over

222.1 thousand and reported net rental real estate

income (less deficit) of $4.5 billion for Tax Year

1998, an increase of 18.0 percent. Despite the

advent of a new industry classification system,

NAICS, the sector for real estate and rental and

leasing continues to dominate these figures. The real

estate group reported 73.2 percent of net rental

income (less deficit) for all S corporations. This

same group also represented over 71.5 percent of all

returns reporting income on Form 8825. Other

activities related to rental real estate and reported on

this form are net gain from sales of business property, which reported a 23.8-percent increase to

$109.0 million. This increase was due not only to an

increase in gains but also from a decrease in the

losses reported by the sales of business property as

well. Losses for Tax Year 1997 were $5.5 million,

while losses reported for Tax Year 1998 were $4.8

million. Net income (less deficit) from partnerships

and fiduciaries reported a slight decline to $490

million from $512 million between Tax Years 1997

and 1998.

Taxes

Data by Number of Shareholders

Figure F

S corporations continue to be owned by 10 or fewer

shareholders despite changes in the Tax Code to

ease restrictions on the limitation to the number of

shareholders [12]. Nearly all (99.0 percent) S

corporations reported having 10 or fewer shareholders (Table 5). S corporations reporting more than 10

shareholders and fewer than 31 shareholders decreased from 20,369 in Tax Year 1997 to 18,000 in

Tax Year 1998, yet S corporations with more than 30

shareholders increased from over 1,200 to nearly

1,400 (or 10.5 percent). Nearly all new S corporations (99.9 percent) reported 10 or fewer

While most S corporations generally do not pay

income tax, less than half of 1 percent reported some

Federal income tax liability for Tax Year 1998, and

the number of S corporations reporting such a liability

is growing. An S corporation can, generally, be

subject to just four types of Federal income tax. The

most common tax reported by S corporations is the

“built-in gains” tax. Over 82.0 percent, or $393

million, of all Federal income tax reported by S

corporations for Tax Year 1998 was from the built-in

gains tax. The reported tax liability for this item

increased by 107.0 percent over Tax Year 1997

(Figure F). The built-in gains tax can only apply to an

S corporation that has not had a valid S election in

place since inception. S corporations that are potentially liable for this tax are those that made an S

election after 1986 and realized a gain on the sale of

an asset held at the time of that election within 10

years from the first day of the S corporation’s

election. The gain that results in a tax liability is built

in to the extent of the appreciation of the asset that

occurred while the corporation was subject to the

rules of a taxable corporation [13].

Other taxes that can result in a Federal income

tax liability for an S corporation are the excess net

passive income tax, the LIFO recapture tax (included

S Corporation Taxes, Tax Years 1997 and 1998

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Items

1997

1998

(1)

(2)

Percent

change

Total tax.......................................................................................

256,352

479,411

(3)

87.0

Built-in gains tax.......................................................................................

190,016

393,322

107.0

Excess net passive income tax.......................................................................................

16,494

17,466

5.9

Adjustments to tax.......................................................................................

46,393

66,594

43.5

Investment credit recapture tax.......................................................................................

*1,042

*755

*-27.5

Income tax adjustment.......................................................................................

*2,407

*1,275

*-47.0

*Estimate should be used with caution because of the small number of sample returns

on which it is based.

S Corporation Returns, 1998

in “Adjustments to tax” in Figure E), and the recapture of prior year’s investment credit. All of these

apply only to corporations that had operated as taxable corporations before their S elections. The excess net passive income tax is imposed on S corporations that were previously taxable corporations and

that have subchapter C earnings and profits if their

passive investment income exceeds 25 percent of

gross receipts [14]. The last-in, first-out, or LIFO

recapture tax, applies to corporations that switched

from C to S status after December 17, 1987, and that

had valued their inventory assets using LIFO. Upon

conversion, these corporations are required to include

in gross income a LIFO recapture amount, which is

the amount of inventory valued under the first-in,

first-out (FIFO) method that exceeds the inventory

valued under LIFO. Similarly, if inventory is transferred in a tax-free reorganization from a taxable C

corporation to an S corporation, there must be a

LIFO recapture adjustment made to gross income.

Finally, an S corporation can be liable for recapture

attributable to credits allowed in years before the

corporation was an S corporation.

Figure E shows tax liability reported by S corporations for Tax Years 1997 and 1998. The adjustments to tax include Section 1363(d) LIFO recapture

taxes and interest due from Form 8697, Interest

Computation under Look-Back Method for Completed Long-Term Contracts. The income tax

adjustment includes Section 1291(c)(2) deferred tax

of a shareholder in a passive foreign investment

company.

Largely due to the “built-in gains” tax, S corporations reported an increase in total tax liability of 87.0

percent to $479.4 million for Tax Year 1998. Total

net income (less deficit) reported by all S corporations for Tax Year 1998 was $181.8 billion, and total

tax liability was $479.4 million. Tax liability was

reported by more than 10,400 S corporations for Tax

Year 1998, an increase of more than 2,500 over Tax

Year 1997. While total tax liability has increased,

there remain fewer than half of 1 percent (0.40

percent) of all S corporations reporting a Federal

income tax liability.

Conclusion

S corporations continued on a trend of steady growth

as the number of filings increased to nearly 2.6

million. S corporations also continued to be the single

most popular corporate entity filing the Form 1120

series as 53.4 percent of all corporate returns were S

corporations. Total net income (less deficit) increased by 18.8 percent to $181.8 billion for Tax

Year 1998. Net income (less deficit) from a trade or

business is the largest component of total net income

(less deficit) as it accounted for 68.7 percent of the

total, or $124.9 billion. Portfolio income (less loss)

increased by nearly 40 percent to $51.5 billion, most

of this increase due to net long-term capital gains,

which grew to nearly $38.0 billion for Tax Year

1998. Included in total net income (less deficit) is

rental real estate net income (less deficit), which was

reported at $4.5 billion, an increase of 18.0 percent.

The number of returns filing this type of income was

up by more than 8.1 percent, or 222.2 thousand S

corporations. Total assets reported by S corporations

amounted to nearly $1.5 trillion, with four industrial

divisions holding more than 85 percent of total assets

reported. Data reported for Tax Year 1998 are

being classified for the first time using the newly

adopted NAICS industry classification system.

Longitudinal comparisons by industry are impeded

due to this new system.

Tax professionals have compared S corporations

to other pass-through entity types, and several have

speculated that the LLC would take over as the

dominant pass-through entity choice. Data provided

thus far do not support this claim. Nearly all (99.0

percent) S corporations reported 10 or fewer shareholders despite changes in the tax law that lessened

restrictions on the limitations imposed. New S corporations were even more likely to have 10 or fewer

shareholders, as 99.9 percent of all new S corporations reported as such. Despite increases in the

number of returns reporting a Federal tax liability, as

in prior years, less than half of 1 percent of all S

corporations reported such a liability. The most

common tax liability reported is the built-in gains tax,

which increased by 107.0 percent over Tax Year

1997.

DataSourcesandLimitations

The statistics for Tax Year 1998 are based on a

sample of S corporation income tax returns with

accounting periods ending July 1998 through June

1999 that posted to the Internal Revenue Service

Business Master File between July 1998 and the end

of June 2000.

S Corporation Returns, 1998

The estimates in this article were based on a

stratified probability sample of 41,434 S corporation

returns drawn from a total population of 2,716,507

returns. The stratification was based on combinations

of total assets and ordinary income. 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 40,532 active S corporation returns. Based

on this count, the number of active S corporations for

Tax Year 1998 was estimated to be 2,588,088.

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 G 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.

NotesandReferences

[1] For detailed information on the impact of these

legislative acts on S corporations, see the

following articles: For more information on the

impact of the Tax Reform Act of 1986 on S

corporations, see Gill, Amy, “S Corporation

Returns, 1992,” Statistics of Income Bulletin,

Spring 1995, Volume 14, 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. For more information on the impact

of the Revenue Reconciliation Act of 1993, see

Wittman, Susan, “S Corporation Returns, 1994,”

Statistics of Income Bulletin, Spring 1997,

Volume 16, Number 4. For more information on

the impact of the Small Business Job Protection

Act of 1996, see Wittman, Susan, “S Corporation Returns, 1997,” Statistics of Income

Bulletin, Spring 2000, Volume 19, Number 4.

[2] 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. Limited

liability companies that choose to be taxed as a

corporation can file Form 1120; however, only

an “LLC” designation in the name can identify

such entities as the form is not designed to

clearly identify these unincorporated associations. The number of returns with an “LLC”

designation in the Statistics of Income corporate

file is unpublished and small.

Figure G

Coefficients of Variation for Number of Returns, Number of Shareholders, Total Receipts, Dividends,

and Interest, by Industrial Division, Tax Year 1998

Industrial division

Number of

Total

Dividend

Interest

returns

shareholders

receipts

income

(1)

(2)

(3)

(4)

(5)

Percentages

0.68

3.89

1.84

Raw materials and energy production..................................................................................................

4.38

5.81

Goods production..................................................................................................

1.71

2.22

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

0.25

0.80

4.21

0.99

6.66

4.20

4.49

1.95

Distribution and transportation of goods..................................................................................................

1.58

2.02

1.25

9.25

3.02

Information..................................................................................................

7.02

5.30

12.07

5.29

Finance, insurance, real estate, and rental and leasing..................................................................................................

1.73

2.68

4.38

9.59

5.35

Professional and business services..................................................................................................

1.94

2.36

Education, health, and social assistance..................................................................................................

3.94

6.18

2.81

5.54

9.53

20.46

6.42

11.52

Leisure, accommodation, and food services..................................................................................................

2.71

3.59

2.55

12.38

5.45

Other services..................................................................................................

3.92

4.48

12.79

9.48

8.21

4.72

¹ Includes returns not allocable by industrial division.

S Corporation Returns, 1998

[3] North American Industry Classification

System United States, 1997, Executive Office

of the President, Office of Management and

Budget.

[4] Provisions exist to allow for late-filed election to

be considered as timely made. See Revenue

Procedure 97-40 for extended filings. For

further detail on filing an S election, see Internal

Revenue Service, Internal Revenue Code,

Subchapter S [Section 1362(a), (b)].

[5] Eligible trusts are defined in the Internal

Revenue Code 1361(c)(2)(A); eligible trusts

include those that are treated as owned by an

individual who is a citizen or resident of the

United States. Eligible exempt organizations are

defined in Internal Revenue Code 401(a);

these organizations include qualified pension

plans, profit-sharing plans, and stock bonus

plans, or eligible exempt organizations defined in

Internal Revenue Code 501(c)(3), which

includes certain tax-exempted organizations.

[6] S corporations may elect another tax year if a

business purpose can be established to the

satisfaction of the Internal Revenue Service, or

they may use an alternate tax year but make

“required payments” to the Internal Revenue

Service per Code section 1378.

[7] For more information on partnerships, see

Zempel, Alan, “Partnership Returns, 1998,”

Statistics of Income Bulletin, Fall 2000, Volume 20, Number 2.

[8] For more information on partnerships, limited

liability companies, and general partnerships, see

Zempel, Alan, “Partnership Returns, 1998,”

Statistics of Income Bulletin, Fall 2000, Volume 20, Number 2.

[9] For more information on the impact of the Small

Business Job Protection Act of 1996, see

Wittman, Susan, “S Corporation Returns, 1997,”

Statistics of Income Bulletin, Spring 2000,

Volume 19, Number 4.

[10] Total net income (less deficit) as specified here

includes the following income items: net

income (less deficit) from 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. On Form 1120S, there are some

deduction items to be drawn against the income

items listed above, as well as the reduction in

income reported due to the built-in gains tax.

After these deductions and adjustments are

made, total net income (less deficit) is $169.8

billion.

[11] Ibid. (see [9])

[12] Ibid. (see [9])

[13] 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.

[14] “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.

SOURCE: IRS, Statistics of Income Bulletin, Spring

2001, Publication 1136 (Revised 5-01).

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Raw materials and energy production

Agriculture, forestry, fishing, and hunting

All

Item

industries

Support

Total

Forestry

Total

activities and

Agriculture

and

fishing,

production

logging

hunting,

Mining

Utilities

(3)

(4)

(5)

69,418

44,943

7,559

16,915

(7)

15,479

(8)

2,124

173,271

118,188

18,201

36,882

38,765

5,723

Total receipts ¹...........................................................................................

3,061,133,169

66,762,681

48,369,315

30,590,979

5,643,933

12,134,403

15,672,706

2,720,659

Business receipts...........................................................................................

3,004,118,934

61,579,629

Interest on Government obligations:

44,385,790

27,039,066

5,589,872

11,756,852

14,577,947

2,615,892

State and local...........................................................................................

989,514

36,218

18,950

Net gain, noncapital assets...........................................................................................

7,072,292

582,378

262,262

16,495

211,195

*1,683

6,519

772

44,549

16,654

316,547

614

3,568

and trapping

(1)

(2)

Number of returns...........................................................................................

2,588,088

87,021

Number of shareholders...........................................................................................

4,839,618

217,758

(6)

Income and deductions from a trade

or business:

Other receipts...........................................................................................

48,952,430

4,564,456

3,702,313

3,324,223

45,860

332,230

761,557

100,585

Total deductions...........................................................................................

2,935,284,231

65,158,906

48,052,984

30,739,826

5,627,344

11,685,813

14,488,131

2,617,792

Cost of goods sold...........................................................................................

1,933,927,048

34,546,825

25,146,324

Compensation of officers...........................................................................................

118,740,561

1,524,380

1,016,483

14,404,021

536,082

3,385,296

155,284

7,357,008

325,117

7,602,023

460,217

1,798,478

47,680

Salaries and wages...........................................................................................

304,673,213

5,057,703

Repairs...........................................................................................

18,852,368

1,485,803

Bad debts...........................................................................................

6,287,840

83,495

3,909,015

1,223,875

48,852

2,563,363

760,185

34,932

383,631

158,865

7,574

962,021

304,826

6,346

975,978

246,440

29,146

172,710

15,489

5,497

Rent paid on business property...........................................................................................

68,307,705

1,930,744

1,564,797

Taxes paid...........................................................................................

62,621,621

1,566,311

944,203

1,308,754

639,286

53,133

106,420

202,910

198,498

288,910

567,336

77,037

54,772

Interest paid...........................................................................................

37,153,707

1,597,470

Amortization...........................................................................................

3,659,561

142,729

1,061,877

74,856

773,820

59,312

121,799

2,390

166,258

13,154

441,461

58,798

94,131

9,076

Depreciation...........................................................................................

51,485,900

3,161,226

Depletion...........................................................................................

495,092

287,659

2,138,434

136,960

1,442,651

*7,502

286,727

*128,148

409,056

*1,310

887,713

146,424

135,079

4,275

Advertising...........................................................................................

29,455,958

220,120

Pension, profit-sharing, stock

193,620

98,354

3,872

91,393

23,334

3,166

bonus, and annuity plans...........................................................................................

10,704,288

125,551

67,831

Employee benefit programs...........................................................................................

22,010,877

441,061

251,815

38,800

173,629

8,509

24,838

20,523

53,348

49,597

173,636

8,123

15,610

Net loss, noncapital assets...........................................................................................

641,708

36,901

4,903

Other deductions...........................................................................................

266,266,785

12,950,928

10,269,139

4,589

7,894,547

275

800,585

1,574,007

31,998

2,505,120

-176,669

Total receipts less total deductions...........................................................................................

125,848,938

1,603,774

316,332

-148,848

16,589

448,590

1,184,575

102,868

Net income (less deficit)

from a trade or business...........................................................................................

124,859,425

1,567,556

297,381

-165,343

14,906

447,818

1,167,921

102,254

2,698,307

2,400,926

1,745,535

1,910,877

208,341

193,436

744,431

296,613

1,808,203

640,282

225,038

122,785

Portfolio income (less deficit)

distributed to shareholders...........................................................................................

51,465,087

2,200,440

556,411

Net income...........................................................................................

171,096,577

4,731,549

Deficit...........................................................................................

46,237,152

3,163,993

360,014

68,103

128,294

1,231,779

412,250

Dividend income...........................................................................................

1,612,865

97,894

Interest income...........................................................................................

10,629,968

504,354

26,011

249,430

15,310

187,474

1,718

25,277

8,983

36,679

71,014

202,279

869

52,645

Royalty income...........................................................................................

619,003

116,134

Net short-term capital gain

(less loss)...........................................................................................

507,233

-4,082

25,284

24,656

628

90,850

-5,654

222

-2,465

*-3,411

1,764

-192

253,487

124,797

42,630

86,060

864,972

358,929

Other portfolio income (net)...........................................................................................

142,192

8,752

7,852

7,555

314

-17

900

157,285

162,325

147,449

152,209

2,307

2,379

7,529

7,737

11,305

25,967

-786

637

5,040

4,760

209

14,662

1,424

Net long-term capital gain

(less loss)...........................................................................................

37,953,826

1,477,388

Real estate rental net income

(less deficit)...........................................................................................

4,546,215

167,804

Net income...........................................................................................

6,673,561

188,929

Deficit...........................................................................................

2,127,346

21,126

Net income (less deficit)

from other rental activity...........................................................................................

917,576

28,804

23,380

16,654

849

*5,876

5,267

*157

25,478

*2,099

18,525

*1,871

881

*6,072

196

7,237

*1,970

*157

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

181,788,303

3,964,603

1,034,457

Net income...........................................................................................

223,972,910

6,851,195

3,233,710

358,775

2,122,403

86,165

263,075

589,517

848,232

2,416,272

2,999,515

513,875

617,970

1,763,628

176,910

258,716

583,243

104,095

Net income...........................................................................................

1,246,257

32,872

Deficit...........................................................................................

328,681

4,069

Deficit...........................................................................................

42,184,607

2,886,592

2,199,254

Footnotes at end of table.

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Goods production

Item

Total

Construction

Building,

Special

Manufacturing

developing,

Heavy

trade

and general

construction

contractors

Beverage

Total

Food

and tobacco

manufacturing

contracting

(9)

(10)

(11)

product

manufacturing

(13)

(14)

129,539

12,274

163,717

146,617

8,296

1,497

239,117

22,683

254,355

337,004

30,010

8,001

180,011,911

52,497,391

163,392,020

488,236,031

52,269,759

7,786,403

177,971,064

51,632,072

162,288,974

483,140,763

51,629,162

7,668,447

Number of returns...........................................................................................

452,147

305,531

Number of shareholders...........................................................................................

853,159

516,155

(12)

(15)

(16)

Income and deductions from a trade

or business:

Total receipts ¹...........................................................................................

884,137,352

395,901,321

Business receipts...........................................................................................

875,032,873

391,892,110

Interest on Government obligations:

State and local...........................................................................................

240,252

96,099

57,699

14,193

24,207

144,154

10,762

2,496

Net gain, noncapital assets...........................................................................................

1,538,686

582,571

154,661

Other receipts...........................................................................................

7,325,541

3,330,541

1,828,486

235,642

615,485

192,268

886,570

956,115

3,995,000

83,416

546,418

10,883

104,577

173,516,974

147,517,792

50,078,521

39,305,498

154,073,027

106,921,648

460,534,934

333,454,799

50,194,548

38,508,861

7,308,845

4,508,103

Compensation of officers...........................................................................................

27,496,128

12,488,695

4,109,646

Salaries and wages...........................................................................................

53,909,049

18,828,533

5,143,323

1,236,642

2,067,650

7,142,407

11,617,561

15,007,433

35,080,516

773,591

3,154,780

141,823

778,868

404,064

221,730

333,069

56,288

851,187

239,224

2,317,337

834,640

267,007

47,394

64,878

7,402

Rent paid on business property...........................................................................................

11,377,185

5,238,607

1,094,863

Taxes paid...........................................................................................

16,516,673

6,779,024

1,816,947

1,355,059

798,589

2,788,685

4,163,488

6,138,578

9,737,649

577,574

656,664

88,854

269,928

Total deductions...........................................................................................

838,203,457

377,668,522

Cost of goods sold...........................................................................................

627,199,736

293,744,937

Repairs...........................................................................................

3,905,656

1,588,319

Bad debts...........................................................................................

1,351,882

517,242

Interest paid...........................................................................................

8,738,732

3,146,720

Amortization...........................................................................................

587,322

119,764

1,713,049

71,714

384,005

7,411

1,049,666

40,639

5,592,012

467,557

464,042

37,446

105,378

22,453

Depreciation...........................................................................................

17,419,654

5,575,526

Depletion...........................................................................................

180,031

26,957

1,075,347

5,148

1,519,941

19,891

2,980,238

*1,918

11,844,128

153,074

1,016,694

275,446

1,001

Advertising...........................................................................................

5,810,256

1,212,697

464,403

Pension, profit-sharing, stock

bonus, and annuity plans...........................................................................................

3,296,223

1,223,097

317,861

49,394

698,900

4,597,559

959,786

389,324

276,102

629,134

2,073,126

179,655

29,971

Employee benefit programs...........................................................................................

8,422,918

3,287,721

692,336

Net loss, noncapital assets...........................................................................................

105,247

21,623

6,619

371,792

5,631

2,223,593

9,373

5,135,196

83,624

422,040

3,742

95,483

*523

8,862,133

2,291,559

12,715,366

28,017,706

3,125,273

529,410

Total receipts less total deductions...........................................................................................

45,933,895

18,232,799

6,494,936

Other deductions...........................................................................................

51,886,765

23,869,058

2,418,870

9,318,993

27,701,096

2,075,211

477,558

Net income (less deficit)

from a trade or business...........................................................................................

45,693,643

18,136,701

6,437,237

2,404,678

9,294,785

27,556,943

2,064,448

475,062

8,876,967

2,439,730

2,698,619

293,942

10,458,409

1,163,624

33,057,590

5,500,647

2,374,839

310,391

575,415

100,353

distributed to shareholders...........................................................................................

10,715,234

2,915,819

1,774,397

Dividend income...........................................................................................

305,010

121,778

49,965

374,066

38,934

767,356

32,878

7,799,415

183,232

323,576

16,849

43,228

2,549

Net income...........................................................................................

55,091,586

22,033,996

Deficit...........................................................................................

9,397,942

3,897,296

Portfolio income (less deficit)

Interest income...........................................................................................

2,616,906

1,267,598

Royalty income...........................................................................................

73,909

5,758

739,298

407

223,377

3,200

304,923

*2,151

1,349,308

68,151

113,481

2,131

33,926

Net short-term capital gain

(less loss)...........................................................................................

38,068

49,328

43,504

3,909

1,915

-11,260

-1,669

-1,391

Net long-term capital gain

(less loss)...........................................................................................

7,670,690

1,463,443

935,156

103,215

425,072

6,207,247

192,612

8,118

Other portfolio income (net)...........................................................................................

10,651

7,913

6,067

*1,431

416

2,737

172

Real estate rental net income

(less deficit)...........................................................................................

312,765

175,529

Net income...........................................................................................

431,470

276,699

134,741

230,130

23,187

23,918

17,601

22,650

137,236

154,771

13,074

14,071

6,702

7,019

Deficit...........................................................................................

118,705

101,170

95,389

731

5,049

17,535

997

317

Net income (less deficit)

from other rental activity...........................................................................................

103,384

29,067

10,111

14,316

4,640

74,317

2,119

*5,881

11,588

*1,477

15,933

1,616

4,736

79,092

4,775

2,228

109

*6,743

862

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

56,825,026

21,257,116

8,356,486

Net income...........................................................................................

65,442,311

25,019,340

10,785,028

2,816,247

3,053,432

10,084,382

11,180,879

35,567,911

40,422,970

2,403,218

2,694,253

530,874

626,628

237,185

1,096,498

4,855,060

291,036

95,754

Net income...........................................................................................

111,348

32,256

Deficit...........................................................................................

7,964

3,189

Deficit...........................................................................................

8,617,284

3,762,225

Footnotes at end of table.

2,428,542

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Goods production--continued

Textile mills

Item

Leather and

Manufacturing--continued

Wood

Printing

Petroleum

and textile

Apparel

allied

product

Paper

and related

and coal

Chemical

product

manufacturing

product

manufacturing

support

products

manufacturing

activities

manufacturing

(20)

(21)

(22)

(23)

mills

(17)

manufacturing

(18)

(19)

Number of returns...........................................................................................

3,535

8,197

(24)

1,126

6,326

1,568

18,365

624

4,633

1,863

14,565

5,577

31,924

1,019

15,160

2,330,300

26,628,855

16,984,622

28,457,999

4,382,189

16,228,772

2,329,340

26,357,318

16,833,858

28,222,618

4,282,063

15,942,628

Number of shareholders...........................................................................................

8,622

15,326

Income and deductions from a trade

or business:

Total receipts ¹...........................................................................................

18,039,541

25,865,697

Business receipts...........................................................................................

17,675,860

25,489,970

Interest on Government obligations:

State and local...........................................................................................

4,526

4,401

*627

3,493

11,952

5,839

*387

4,336

303

43,328

224,717

43,102

95,710

75,954

153,588

34,924

64,815

36,309

245,500

2,241,356

1,572,400

25,415,854

20,221,821

16,429,767

12,092,293

26,948,148

16,674,251

4,153,836

3,226,610

15,137,146

9,648,705

Compensation of officers...........................................................................................

534,733

800,020

80,173

Salaries and wages...........................................................................................

1,027,312

2,185,648

206,268

497,350

1,230,687

418,800

1,221,152

1,350,488

2,809,918

89,036

239,554

539,017

1,516,041

6,022

5,873

126,796

29,955

91,762

26,836

197,460

86,362

42,575

13,057

118,265

44,499

Rent paid on business property...........................................................................................

159,863

377,455

30,104

Taxes paid...........................................................................................

306,193

483,803

47,286

188,911

490,011

240,116

318,601

675,325

748,630

45,633

62,108

242,644

314,642

Interest paid...........................................................................................

208,440

401,909

Amortization...........................................................................................

8,090

9,993

41,525

865

338,722

18,167

261,057

14,926

396,629

42,132

55,020

5,127

191,919

40,816

Depreciation...........................................................................................

354,722

301,217

Depletion...........................................................................................

---

27,809

640,844

137,462

638,156

*327

1,043,556

115,869

1,049

409,649

1,264

Advertising...........................................................................................

66,638

246,253

39,638

Pension, profit-sharing, stock

bonus, and annuity plans...........................................................................................

47,869

62,117

4,194

124,589

52,779

253,622

19,608

265,388

95,083

80,972

129,163

13,501

76,197

Employee benefit programs...........................................................................................

140,367

178,036

27,732

Net loss, noncapital assets...........................................................................................

1,199

9,907

222,422

7,032

162,343

1,808

313,688

26,951

30,003

170,840

1,159

151,464

1,046,002

807,840

2,199,972

195,087

1,556,102

Total receipts less total deductions...........................................................................................

625,910

705,031

88,945

1,213,001

554,855

1,509,851

228,353

1,091,627

Net gain, noncapital assets...........................................................................................

14,694

36,393

Other receipts...........................................................................................

344,461

334,932

Total deductions...........................................................................................

17,413,631

25,160,665

Cost of goods sold...........................................................................................

13,717,604

18,448,548

Repairs...........................................................................................

63,518

55,402

Bad debts...........................................................................................

64,405

42,599

Other deductions...........................................................................................

712,678

1,557,760

Net income (less deficit)

from a trade or business...........................................................................................

621,385

700,631

88,318

1,209,508

542,903

1,504,012

227,966

1,087,291

137,400

49,083

1,557,661

348,153

915,470

372,568

1,895,057

391,045

275,918

*47,952

1,334,063

246,772

distributed to shareholders...........................................................................................

110,345

321,942

9,184

Dividend income...........................................................................................

5,160

8,771

2,399

187,223

3,248

245,078

14,636

631,462

8,489

67,059

1,090

1,696,699

16,261

Net income...........................................................................................

920,716

1,134,409

Deficit...........................................................................................

299,332

433,778

Portfolio income (less deficit)

Interest income...........................................................................................

50,506

41,883

Royalty income...........................................................................................

1,650

12,324

5,363

71,093

*80

48,360

5,719

85,115

7,216

62,824

5,496

Net short-term capital gain

(less loss)...........................................................................................

1,541

1,516

-295

1,320

1,665

*1,225

-24,132

Net long-term capital gain

(less loss)...........................................................................................

51,873

257,078

1,356

112,799

174,951

535,444

57,528

1,636,105

298

686

*145

*2,263

*2,273

11,129

11,695

208

2,012

-2,314

3,353

813

2,585

2,747

566

1,804

5,667

161

Other portfolio income (net)...........................................................................................

*-385

369

Real estate rental net income

(less deficit)...........................................................................................

2,993

8,747

Net income...........................................................................................

3,134

9,886

Deficit...........................................................................................

141

*1,139

Net income (less deficit)

from other rental activity...........................................................................................

*3,766

1,639

3,912

838

*4,470

*237

2,449

4,070

158

*1,208

*370

*4,679

*209

*237

2,657

209

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

738,490

1,032,958

99,767

Net income...........................................................................................

1,019,105

1,438,506

145,165

1,411,773

1,729,712

789,027

1,070,824

2,137,630

2,485,772

296,076

342,692

2,789,023

2,974,295

317,939

281,797

348,142

*46,616

185,272

Net income...........................................................................................

*3,767

1,639

Deficit...........................................................................................

280,615

405,548

45,398

Footnotes at end of table.

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Goods production--continued

Manufacturing--continued

Electrical

Item

Plastics and

Nonmetallic

Primary

Fabricated

rubber

mineral

metal

products

manufacturing

products

manufacturing

(25)

(26)

Computer

equipment,

Machinery

and electronic

appliance, and

equipment

manufacturing

products

component

manufacturing

(30)

(31)

manufacturing

(27)

Number of returns...........................................................................................

7,043

5,675

(28)

(29)

Transportation

(32)

3,232

22,590

10,394

6,548

5,909

4,811

8,672

50,694

24,698

14,309

11,924

9,467

Total receipts ¹...........................................................................................

31,343,387

15,283,161

23,411,433

73,728,918

28,591,350

20,428,522

19,049,651

25,270,072

Business receipts...........................................................................................

31,040,548

15,144,223

Interest on Government obligations:

23,245,394

73,026,876

28,345,820

20,331,393

18,914,942

25,020,470

State and local...........................................................................................

13,542

3,844

1,810

Net gain, noncapital assets...........................................................................................

82,689

36,001

28,304

26,939

195,149

13,855

45,000

6,369

15,921

7,098

13,611

11,179

67,299

Number of shareholders...........................................................................................

17,663

12,043

Income and deductions from a trade

or business:

Other receipts...........................................................................................

206,608

99,093

135,925

479,954

186,675

74,839

114,000

171,123

Total deductions...........................................................................................

29,092,282

14,324,520

22,610,533

68,107,646

26,499,982

19,043,719

17,817,172

23,673,072

Cost of goods sold...........................................................................................

21,125,203

9,638,635

18,959,667

Compensation of officers...........................................................................................

1,057,540

456,163

362,762

48,447,252

3,127,747

18,625,272

1,125,048

13,654,474

643,410

12,454,497

534,137

18,762,519

416,567

Salaries and wages...........................................................................................

1,943,417

1,203,282

Repairs...........................................................................................

139,095

140,264

Bad debts...........................................................................................

47,263

39,592

851,320

115,690

20,482

4,936,366

326,756

139,090

2,122,771

108,583

32,643

1,833,603

56,281

27,528

1,739,989

76,553

29,551

1,386,975

75,073

20,457

Rent paid on business property...........................................................................................

331,312

296,089

113,475

Taxes paid...........................................................................................

633,682

404,425

323,143

979,077

1,728,647

340,777

654,806

238,230

344,872

201,145

359,235

203,389

463,985

Interest paid...........................................................................................

395,383

174,532

Amortization...........................................................................................

25,784

14,788

219,676

11,424

848,345

53,490

352,441

21,306

166,921

17,252

184,733

16,641

235,493

19,086

Depreciation...........................................................................................

1,042,977

559,681

Depletion...........................................................................................

1,040

10,137

461,468

2,187,640

683,171

381,029

106

361,898

466,701

Advertising...........................................................................................

178,285

138,834

Pension, profit-sharing, stock

26,174

370,392

210,729

211,751

237,083

131,161

bonus, and annuity plans...........................................................................................

133,489

73,431

84,562

Employee benefit programs...........................................................................................

373,440

169,648

200,098

431,582

984,818

182,655

423,058

94,358

143,817

87,018

225,614

77,312

297,610

Net loss, noncapital assets...........................................................................................

5,855

*509

1,326

Other deductions...........................................................................................

1,658,516

1,004,508

859,267

11,407

3,535,038

649

1,616,075

5,860

1,224,227

1,878

1,307,142

1,500

1,115,243

Total receipts less total deductions...........................................................................................

2,251,105

958,641

800,900

5,621,272

2,091,368

1,384,803

1,232,479

1,597,000

Net income (less deficit)

from a trade or business...........................................................................................

2,237,563

954,797

799,090

5,594,333

2,077,513

1,378,435

1,225,382

1,585,821

946,443

147,353

6,270,142

675,810

2,341,951

264,438

1,668,006

289,572

1,477,438

252,056

1,833,849

248,029

Portfolio income (less deficit)

distributed to shareholders...........................................................................................

201,245

65,279

83,268

Net income...........................................................................................

2,455,844

1,158,665

Deficit...........................................................................................

218,281

203,868

1,283,177

498,515

403,275

138,595

829,836

Dividend income...........................................................................................

9,594

2,182

Interest income...........................................................................................

75,379

47,314

4,506

45,149

32,154

220,626

11,377

106,169

8,456

59,424

6,230

50,771

10,715

90,248

Royalty income...........................................................................................

3,735

404

Net short-term capital gain

(less loss)...........................................................................................

-178

572

346

2,988

11,978

3,268

5,154

4,760

2,527

1,745

346

307

12,623

-777

Net long-term capital gain

(less loss)...........................................................................................

112,638

14,757

30,814

Other portfolio income (net)...........................................................................................

*76

1,025,411

368,617

331,397

63,830

724,880

-75

253

*423

-13

6,708

6,762

34,596

35,666

8,244

8,850

2,088

2,820

6,306

6,564

7,251

1,071

606

*3,485

687

Real estate rental net income

(less deficit)...........................................................................................

7,368

9,713

Net income...........................................................................................

7,882

9,836

Deficit...........................................................................................

515

122

Net income (less deficit)

from other rental activity...........................................................................................

1,145

*526

2,997

15,524

14,488

*1,823

2,222

8,022

*3,518

521

16,457

*933

14,797

309

*1,823

2,222

8,547

525

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

2,447,320

1,030,315

892,063

Net income...........................................................................................

2,644,113

1,215,719

1,029,135

6,927,630

7,518,133

2,598,760

2,836,414

1,785,620

2,057,214

1,369,018

1,588,690

2,430,243

2,625,237

590,504

237,654

271,594

219,672

194,994

Net income...........................................................................................

1,491

*604

Deficit...........................................................................................

346

*78

Deficit...........................................................................................

196,792

185,404

Footnotes at end of table.

137,072

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Goods production--continued

Distribution and transportation of goods

Manufacturing--continued

Furniture

Item

and related

Miscellaneous

products

manufacturing

Wholesale and retal trade

Total

Durable goods

Nondurable

goods

Total

(38)

(39)

(40)

manufacturing

(33)

Retail trade

Wholesale trade

Total

(34)

(35)

(36)

(37)

566,076

484,772

147,102

86,338

60,764

337,251

Number of shareholders...........................................................................................

11,687

43,781

1,030,083

894,361

288,210

171,111

117,099

605,636

Number of returns...........................................................................................

6,047

20,201

Income and deductions from a trade

or business:

Total receipts ¹...........................................................................................

14,240,281

37,915,117

1,376,793,674

1,290,432,025

542,436,210

260,541,519

281,894,691

747,355,429

Business receipts...........................................................................................

14,101,966

37,537,868

1,359,639,369

Interest on Government obligations:

State and local...........................................................................................

2,962

7,737

162,686

1,274,948,656

537,166,311

257,758,166

279,408,146

737,155,889

149,304

95,740

40,194

55,546

53,564

Net gain, noncapital assets...........................................................................................

3,462

89,371

2,107,149

Other receipts...........................................................................................

131,891

280,142

14,884,471

1,247,392

14,086,673

658,093

4,516,066

304,934

2,438,225

353,158

2,077,841

583,634

9,562,342

Total deductions...........................................................................................

13,466,338

35,495,875

1,344,071,813

Cost of goods sold...........................................................................................

9,645,740

23,522,345

1,044,645,203

1,260,741,913

1,009,807,841

526,356,182

425,435,868

250,634,402

196,992,291

275,721,780

228,443,576

733,755,764

583,926,784

Compensation of officers...........................................................................................

440,220

1,618,806

26,404,681

Salaries and wages...........................................................................................

1,102,964

3,589,601

98,501,831

23,807,555

86,715,505

11,744,718

34,547,175

6,700,262

18,954,502

5,044,456

15,592,674

12,059,353

52,130,407

Repairs...........................................................................................

54,599

190,758

Bad debts...........................................................................................

29,607

80,044

6,489,764

2,216,029

4,728,247

2,038,043

1,852,875

1,115,998

854,629

664,944

998,246

451,054

2,871,446

921,352

Rent paid on business property...........................................................................................

217,857

590,749

25,304,014

Taxes paid...........................................................................................

326,767

800,222

19,089,884

20,041,095

16,242,717

5,961,435

6,936,447

3,137,671

2,841,933

2,823,764

4,094,514

14,068,358

9,299,312

Interest paid...........................................................................................

121,673

428,174

Amortization...........................................................................................

4,925

82,846

10,970,296

838,966

9,711,579

772,287

4,177,183

306,044

2,251,039

92,145

1,926,144

213,899

5,522,920

465,050

Depreciation...........................................................................................

226,864

648,738

Depletion...........................................................................................

-632

14,064,554

20,687

9,770,114

20,277

4,123,086

7,435

2,291,042

*5,825

1,832,044

1,609

5,639,210

12,842

Advertising...........................................................................................

165,695

509,832

Pension, profit-sharing, stock

12,698,473

12,410,876

2,828,466

1,507,921

1,320,544

9,569,896

bonus, and annuity plans...........................................................................................

39,939

150,060

2,382,326

Employee benefit programs...........................................................................................

140,164

413,976

6,022,250

Net loss, noncapital assets...........................................................................................

804

1,511

99,848

2,115,608

5,066,037

84,612

1,242,784

2,138,019

23,547

748,380

1,227,385

9,966

494,404

910,634

13,581

872,612

2,919,127

61,066

Other deductions...........................................................................................

948,521

2,867,582

74,323,005

57,409,519

23,915,103

12,354,467

11,560,636

33,416,028

Total receipts less total deductions...........................................................................................

773,944

2,419,242

32,721,862

29,690,112

16,080,029

9,907,117

6,172,911

13,599,665

Net income (less deficit)

from a trade or business...........................................................................................

770,981

2,411,505

32,559,176

29,540,808

15,984,289

9,866,923

6,117,366

13,546,101

42,242,643

-9,683,467

37,628,641

-8,087,833

19,104,710

-3,120,421

11,545,461

-1,678,538

7,559,249

-1,441,883

18,504,047

-4,957,945

distributed to shareholders...........................................................................................

29,886

630,544

8,620,573

Net income...........................................................................................

879,740

2,904,562

Deficit...........................................................................................

-108,758

-493,056

Portfolio income (less deficit)

8,163,305

4,064,069

1,860,891

2,203,177

4,095,128

Dividend income...........................................................................................

1,670

16,895

Interest income...........................................................................................

29,445

105,016

Royalty income...........................................................................................

7,992

239,631

2,144,944

135,335

213,780

1,930,422

134,616

112,682

902,220

86,968

59,140

493,546

34,939

53,542

408,674

52,029

101,065

1,024,559

47,649

Net short-term capital gain

(less loss)...........................................................................................

*-3,938

-4,305

43,452

23,495

-2,447

-4,483

2,036

25,801

Net long-term capital gain

(less loss)...........................................................................................

2,101

504,938

6,046,682

5,851,870

2,958,359

1,272,005

1,686,354

2,893,221

Other portfolio income (net)...........................................................................................

574

10,528

9,121

6,287

5,745

542

2,834

402,120

447,849

357,099

396,456

159,513

177,580

62,344

68,285

97,169

109,294

196,838

218,128

45,729

39,357

18,067

5,941

12,125

21,290

Real estate rental net income

(less deficit)...........................................................................................

1,611

11,321

Net income...........................................................................................

1,611

11,515

Deficit...........................................................................................

194

Net income (less deficit)

from other rental activity...........................................................................................

-2,256

184,433

142,750

75,329

62,903

12,425

67,491

Net income...........................................................................................

-2,401

231,335

155,584

83,758

70,745

13,013

71,826

Deficit...........................................................................................

46,902

12,834

8,430

*7,842

*588

4,335

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

802,479

3,055,626

41,766,302

Net income...........................................................................................

908,351

3,473,012

50,348,270

38,203,962

45,219,674

20,283,199

22,842,215

11,853,062

13,293,776

8,430,137

9,548,439

17,905,559

22,355,608

7,015,712

2,559,016

1,440,715

1,118,302

4,450,049

145

Deficit...........................................................................................

105,872

417,385

8,581,968

Footnotes at end of table.

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Distribution and transportation of goods--continued

Wholesale and retal trade--continued

Retail trade--continued

Building

Item

Motor vehicle

Furniture

Electronics

material

Food

Health

and

and home

and

and garden

and

Gasoline

Clothing and

clothing

parts dealers

furnishings

appliance

equipment

beverage

personal care

stations

accessories

(45)

(46)

(47)

(48)

and supplies

dealers

(41)

(42)

(43)

Number of returns...........................................................................................

46,613

18,305

(44)

17,299

19,718

52,362

20,123

20,221

27,995

31,112

38,827

96,797

32,803

36,978

48,039

Total receipts ¹...........................................................................................

386,117,380

28,904,837

23,650,470

40,468,336

88,061,217

22,201,818

49,723,094

17,062,667

Business receipts...........................................................................................

380,210,138

28,574,444

Interest on Government obligations:

23,315,889

40,173,943

86,836,893

22,086,417

49,374,589

16,929,749

State and local...........................................................................................

12,453

4,996

4,588

Net gain, noncapital assets...........................................................................................

233,819

3,459

20,604

1,738

34,247

12,876

88,580

2,701

14,513

1,012

8,596

2,979

8,996

Number of shareholders...........................................................................................

82,834

34,078

Income and deductions from a trade

or business:

Other receipts...........................................................................................

5,660,970

321,938

309,388

258,408

1,122,868

98,188

338,897

120,943

Total deductions...........................................................................................

381,767,627

27,858,903

Cost of goods sold...........................................................................................

332,584,168

17,822,948

22,879,180

17,003,037

39,199,047

28,911,828

86,432,594

64,430,081

21,521,813

14,900,794

49,234,795

41,233,925

16,624,960

10,241,150

Compensation of officers...........................................................................................

3,574,467

869,972

578,058

Salaries and wages...........................................................................................

18,523,185

3,223,303

2,293,175

1,136,379

3,775,598

1,342,429

7,985,809

887,502

2,421,769

408,322

2,642,986

598,332

1,929,698

63,015

38,497

212,262

99,294

673,245

77,255

67,339

49,027

274,317

20,574

69,906

45,296

Rent paid on business property...........................................................................................

3,443,403

1,249,259

476,833

Taxes paid...........................................................................................

3,079,038

594,475

364,477

774,437

723,624

2,296,621

1,511,750

618,731

347,855

845,541

654,719

1,053,002

358,801

Interest paid...........................................................................................

2,713,720

185,569

Amortization...........................................................................................

97,271

14,301

113,663

15,315

377,392

15,956

565,999

114,279

114,266

30,899

359,640

63,363

158,925

15,196

Depreciation...........................................................................................

1,611,702

220,795

Depletion...........................................................................................

*2,683

173,234

*114

436,768

5,606

1,034,572

*2,080

137,363

674,718

147,452

*2,360

Advertising...........................................................................................

3,832,993

1,091,730

Pension, profit-sharing, stock

303,111

350,659

867,667

349,382

104,450

436,551

bonus, and annuity plans...........................................................................................

226,416

67,143

42,084

Employee benefit programs...........................................................................................

1,281,032

140,373

79,066

104,997

211,828

139,308

526,519

56,296

101,223

24,790

89,944

40,588

68,949

Net loss, noncapital assets...........................................................................................

15,714

*2,258

*1,813

Other deductions...........................................................................................

9,640,931

2,137,498

1,333,688

1,308

2,061,111

6,674

4,858,307

*11,368

1,427,999

2,973

1,834,533

7,538

1,451,214

Total receipts less total deductions...........................................................................................

4,349,752

1,045,934

771,290

1,269,289

1,628,623

680,005

488,298

437,707

766,702

1,267,551

1,615,747

677,304

487,287

434,728

921,755

155,053

1,533,821

266,269

2,216,386

600,640

954,533

277,229

800,103

312,817

784,956

350,227

distributed to shareholders...........................................................................................

1,193,582

210,714

489,283

Repairs...........................................................................................

846,213

171,504

Bad debts...........................................................................................

294,692

67,776

Net income (less deficit)

from a trade or business...........................................................................................

4,337,299

1,040,938

Net income...........................................................................................

5,625,530

1,241,434

Deficit...........................................................................................

1,288,231

200,496

Portfolio income (less deficit)

113,820

373,702

64,955

281,489

125,505

Dividend income...........................................................................................

15,416

7,685

Interest income...........................................................................................

426,596

70,474

3,800

32,524

18,215

75,400

18,411

173,056

2,876

26,463

2,188

60,035

2,430

22,012

Royalty income...........................................................................................

*258

1,218

Net short-term capital gain

(less loss)...........................................................................................

12,724

-539

1,096

373

4,463

12,003

2,230

-703

*-523

-711

-691

Net long-term capital gain

(less loss)...........................................................................................

737,391

131,860

440,956

17,889

181,710

36,139

219,512

97,291

*133

*91

2,656

*2,753

8,369

9,156

48,876

51,061

*6,813

*7,219

24,745

25,651

2,144

2,269

*97

*788

*2,185

*406

*906

124

*176

1,994

*1,232

6,371

*51

*176

2,546

552

*1,232

6,371

*225

*174

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

5,604,691

1,280,460

1,258,817

Net income...........................................................................................

6,731,765

1,448,370

1,406,250

1,391,733

1,643,728

2,039,557

2,582,057

749,082

1,018,951

799,891

1,083,250

562,429

876,479

251,995

542,500

269,869

283,359

314,050

Other portfolio income (net)...........................................................................................

*1,196

*17

Real estate rental net income

(less deficit)...........................................................................................

46,931

7,050

Net income...........................................................................................

50,876

7,471

Deficit...........................................................................................

3,945

421

Net income (less deficit)

from other rental activity...........................................................................................

26,878

*21,757

Net income...........................................................................................

30,440

*21,757

Deficit...........................................................................................

3,562

Deficit...........................................................................................

1,127,074

167,911

Footnotes at end of table.

147,433

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Distribution and transportation of goods--continued

Wholesale and retal trade--continued

Transportation and warehousing

Retail trade--continued

Sporting

Item

Wholesale

Air, rail

goods,

General

Miscellaneous

Nonstore

and retail trade

hobby, book,

merchandise

store

retailers

not allocable

(52)

(53)

and music

(49)

Total

and water

transportation

Truck

transportation

retailers

(50)

(51)

Number of returns...........................................................................................

20,180

7,823

(54)

(55)

(56)

64,065

22,547

419

81,305

5,993

40,805

110,085

37,620

515

135,722

7,971

70,300

Total receipts ¹...........................................................................................

12,656,088

8,844,342

46,315,298

23,349,882

640,386

86,361,649

7,370,140

46,140,674

Business receipts...........................................................................................

12,423,941

8,723,975

Interest on Government obligations:

45,551,871

22,954,038

626,456

84,690,713

6,970,718

45,329,515

State and local...........................................................................................

*458

*1,206

4,500

Net gain, noncapital assets...........................................................................................

38,719

6,664

75,067

4,057

50,372

-*5,665

13,382

859,757

1,606

305,959

6,104

472,036

Number of shareholders...........................................................................................

42,721

13,741

Income and deductions from a trade

or business:

Other receipts...........................................................................................

192,971

112,497

683,860

341,415

8,264

797,798

91,857

333,019

Total deductions...........................................................................................

12,385,861

8,647,066

44,703,049

22,500,868

629,968

83,329,900

7,283,688

44,387,330

Cost of goods sold...........................................................................................

7,848,822

5,776,231

29,809,193

Compensation of officers...........................................................................................

354,053

171,565

1,550,203

Salaries and wages...........................................................................................

1,296,503

1,048,014

4,546,885

13,364,608

588,073

2,443,482

445,190

*3,484

37,922

34,837,361

2,597,126

11,786,327

3,302,407

101,367

786,517

14,651,548

1,325,883

7,480,965

244,378

55,815

136,377

136,738

3,926

693

1,761,517

177,986

328,868

19,696

1,128,410

72,009

Rent paid on business property...........................................................................................

679,065

382,608

1,857,186

Taxes paid...........................................................................................

240,885

171,680

826,262

391,673

425,746

11,302

6,959

5,262,919

2,847,167

285,016

149,175

3,550,007

1,951,473

Interest paid...........................................................................................

138,283

86,143

Amortization...........................................................................................

10,372

6,904

496,980

43,613

212,340

37,583

11,476

*1,193

1,258,717

66,679

241,293

14,011

644,648

29,559

Depreciation...........................................................................................

168,442

90,218

Depletion...........................................................................................

---

543,519

400,425

7,818

4,294,441

410

704,620

2,653,045

104

Advertising...........................................................................................

241,845

216,889

Pension, profit-sharing, stock

588,103

1,186,517

12,515

287,597

32,570

118,939

bonus, and annuity plans...........................................................................................

15,828

12,282

69,040

Employee benefit programs...........................................................................................

51,116

35,062

178,845

73,838

155,169

212

*8,891

266,717

956,213

22,533

65,141

139,324

629,312

Net loss, noncapital assets...........................................................................................

*9,360

*381

1,220

Other deductions...........................................................................................

1,247,084

584,013

3,891,807

458

2,947,841

-78,388

15,236

16,913,486

*9,562

1,220,911

*2,715

10,009,391

Total receipts less total deductions...........................................................................................

270,227

197,276

1,612,248

849,015

10,418

3,031,750

86,452

1,753,344

Repairs...........................................................................................

62,099

50,791

Bad debts...........................................................................................

22,104

14,284

Net income (less deficit)

from a trade or business...........................................................................................

269,769

196,070

1,607,749

844,958

10,418

3,018,368

84,846

1,747,240

2,226,504

618,755

1,299,937

454,979

*19,884

9,466

4,614,002

1,595,635

594,504

509,658

2,300,578

553,338

Portfolio income (less deficit)

distributed to shareholders...........................................................................................

669,963

14,679

257,926

Net income...........................................................................................

547,395

351,692

Deficit...........................................................................................

277,626

155,622

299,510

4,108

457,268

80,057

209,075

Dividend income...........................................................................................

3,693

1,045

Interest income...........................................................................................

12,798

10,485

22,145

62,497

3,159

52,220

3,643

25,851

214,523

6,847

50,929

7,906

74,003

Royalty income...........................................................................................

1,152

-Net short-term capital gain

(less loss)...........................................................................................

*-456

2,512

*33,588

5,415

719

711

639

*-684

*142

19,957

*18,433

-1,434

137,732

239,327

290

194,812

3,117

127,733

Other portfolio income (net)...........................................................................................

--*1,324

1,407

*19

861

30,545

37,779

13,493

14,834

*748

45,021

51,394

3,413

3,429

12,744

13,274

7,234

1,341

6,372

531

Net long-term capital gain

(less loss)...........................................................................................

652,776

*637

Real estate rental net income

(less deficit)...........................................................................................

*-284

5,500

Net income...........................................................................................

*844

8,216

Deficit...........................................................................................

*1,127

*2,716

Net income (less deficit)

from other rental activity...........................................................................................

*36

3,056

*5,861

-70

41,683

23,961

2,924

3,056

*5,885

-70

75,751

34,069

54,864

30,903

4,410

1,486

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

939,485

216,318

1,899,276

Net income...........................................................................................

1,181,648

364,827

2,444,797

1,163,821

1,573,486

15,204

21,851

3,562,340

5,128,596

192,277

729,607

1,971,982

2,507,678

409,665

6,647

1,566,256

537,330

535,696

Net income...........................................................................................

*59

Deficit...........................................................................................

*22

Deficit...........................................................................................

242,163

148,509

545,521

Footnotes at end of table.

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Distribution and transportation of goods--continued

Information

Motion

Transportation and warehousing--continued

Transit and

Other

Warehousing

Item

ground

Pipeline

transportation

and

passenger

transportation

and support

storage

transportation

(57)

Total

picture

Broadcasting

Publishing

and sound

and telecom-

industries

recording

munications

activities

(58)

industries

(59)

Number of returns...........................................................................................

8,049

*47

(60)

(61)

(62)

(63)

(64)

22,794

3,615

56,082

16,724

13,479

17,690

37,597

9,131

115,281

34,821

22,131

44,453

22,999,931

5,114,837

49,122,624

20,925,871

8,143,642

15,167,515

22,755,399

4,961,410

47,432,591

20,020,272

7,863,175

15,191,385

Number of shareholders...........................................................................................

10,642

*81

Income and deductions from a trade

or business:

Total receipts ¹...........................................................................................

4,374,613

*361,452

Business receipts...........................................................................................

4,319,619

*354,051

Interest on Government obligations:

State and local...........................................................................................

*53

*82

3,401

2,136

44,864

17,297

9,128

16,717

Net gain, noncapital assets...........................................................................................

21,102

*20

33,437

Other receipts...........................................................................................

33,840

*7,300

207,694

27,203

124,089

285,766

1,359,403

56,225

832,077

2,345

268,994

219,771

-260,358

22,228,138

13,560,483

4,820,194

1,880,717

46,303,600

17,467,930

19,158,852

7,619,975

7,879,488

2,947,749

14,821,774

5,545,546

Compensation of officers...........................................................................................

183,164

*3,980

841,393

Salaries and wages...........................................................................................

851,111

*4,540

1,820,597

141,339

842,596

3,450,718

7,999,677

1,258,295

3,502,975

1,014,137

739,991

674,203

2,821,914

Repairs...........................................................................................

111,045

*167

Bad debts...........................................................................................

5,477

129,157

68,003

63,869

12,801

325,619

250,623

94,678

90,290

63,082

14,002

137,996

143,725

Rent paid on business property...........................................................................................

239,967

*2,525

544,596

Taxes paid...........................................................................................

194,007

*2,060

369,520

640,809

180,933

1,163,323

1,296,916

411,134

481,877

257,045

165,656

374,436

495,160

Interest paid...........................................................................................

114,740

*5,100

Amortization...........................................................................................

6,782

*3,379

155,197

9,371

97,740

3,577

831,543

551,726

209,565

137,179

91,131

199,057

463,126

194,496

Depreciation...........................................................................................

311,448

*8,630

Depletion...........................................................................................

306

466,443

150,255

1,467,497

363,264

374,983

647,639

Advertising...........................................................................................

23,877

*27

102,263

Pension, profit-sharing, stock

bonus, and annuity plans...........................................................................................

25,816

-42,219

9,921

881,772

452,274

96,048

278,787

36,824

413,848

242,958

58,365

68,963

Employee benefit programs...........................................................................................

75,643

-108,160

Net loss, noncapital assets...........................................................................................

1,328

-*989

77,958

*642

408,012

9,951

243,050

412

25,803

98,176

9,431

Other deductions...........................................................................................

923,935

*69,287

4,009,748

680,215

9,784,443

4,050,926

1,832,391

2,868,177

Total receipts less total deductions...........................................................................................

109,042

*16,475

771,793

294,643

2,819,024

1,767,019

264,153

345,740

Total deductions...........................................................................................

4,265,571

*344,978

Cost of goods sold...........................................................................................

1,196,924

*245,282

Net income (less deficit)

from a trade or business...........................................................................................

108,990

*16,392

768,392

292,507

2,774,160

1,749,722

255,025

329,024

1,113,815

-345,423

389,495

-96,988

5,549,495

-2,775,335

2,299,131

-549,410

829,642

-574,617

1,706,892

-1,377,868

distributed to shareholders...........................................................................................

31,007

*2,625

59,613

Net income...........................................................................................

197,089

*18,521

Deficit...........................................................................................

-88,099

*2,129

Portfolio income (less deficit)

74,892

2,628,957

855,916

314,408

1,391,114

Dividend income...........................................................................................

2,140

Interest income...........................................................................................

12,437

*1,594

Royalty income...........................................................................................

---

6,797

42,735

2,156

32,824

65,654

340,512

15,872

36,243

111,894

1,219

9,264

51,952

17,942

160,700

972

Net short-term capital gain

(less loss)...........................................................................................

*213

2,177

568

-49,504

-63,751

15,175

-626

Net long-term capital gain

(less loss)...........................................................................................

15,739

*1,025

7,861

39,336

2,248,352

769,816

235,422

1,207,086

8,071

*496

*2,534

5,041

Other portfolio income (net)...........................................................................................

*479

-Real estate rental net income

(less deficit)...........................................................................................

441

Net income...........................................................................................

485

---

-559

5,204

28,982

29,001

53,534

54,347

18,429

18,914

18,652

18,661

7,958

8,231

Deficit...........................................................................................

*5,763

813

486

*10

273

Net income (less deficit)

from other rental activity...........................................................................................

*5,564

*10

6,404

*2,819

8,542

1,558

*1,068

5,700

7,845

1,441

*2,928

109

8,703

*161

1,559

*1,128

*60

5,742

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

146,002

*19,027

833,851

Net income...........................................................................................

228,111

*20,925

1,162,119

399,200

480,156

5,465,193

7,853,348

2,625,625

3,052,501

589,153

1,112,039

1,733,796

2,915,131

80,956

2,388,155

426,876

522,886

1,181,335

Net income...........................................................................................

*5,695

*10

Deficit...........................................................................................

130

Deficit...........................................................................................

82,109

Footnotes at end of table.

*1,898

328,268

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Information--

Finance, insurance, real estate, and rental and leasing

continued

Item

Information

Finance and insurance

Securites,

Total

services

Total

Depository

Non-

commodity

Insurance

Funds, trusts,

credit

depository

contracts,

carriers and

and other

inter-

credit inter-

other financial

financial

mediation

investments

activities

vehicles

(71)

(72)

and related

activities

(65)

(66)

(67)

Number of returns...........................................................................................

8,189

403,085

(68)

(69)

(70)

102,884

746

21,525

33,846

45,777

990

197,735

6,406

38,978

72,137

77,876

2,337

Total receipts ¹...........................................................................................

4,885,596

122,080,521

64,269,156

2,184,749

14,166,876

24,519,052

23,023,819

374,661

Business receipts...........................................................................................

4,357,760

113,156,413

Interest on Government obligations:

58,387,565

707,926

12,637,821

22,003,890

22,728,460

309,467

State and local...........................................................................................

1,722

227,990

185,702

Net gain, noncapital assets...........................................................................................

*7,425

1,014,444

271,797

49,348

133,706

6,430

108,023

115,819

26,398

12,159

3,624

1,946

Number of shareholders...........................................................................................

13,877

880,071

Income and deductions from a trade

or business:

Other receipts...........................................................................................

518,689

7,681,674

5,424,092

1,293,769

1,414,603

2,372,945

279,575

63,201

Total deductions...........................................................................................

4,443,485

112,009,273

Cost of goods sold...........................................................................................

1,354,661

25,010,143

58,241,659

9,094,194

1,717,965

13,117,712

2,678,646

22,564,117

2,041,572

20,565,489

4,291,314

276,377

*82,663

Compensation of officers...........................................................................................

504,083

12,747,732

9,336,722

Salaries and wages...........................................................................................

934,798

29,377,812

16,248,075

120,730

225,478

751,982

3,579,435

5,359,462

5,803,969

3,083,263

6,596,412

21,285

42,781

Repairs...........................................................................................

29,863

1,099,958

Bad debts...........................................................................................

2,606

830,270

291,299

649,778

16,237

43,807

69,492

379,864

69,730

180,283

134,477

42,927

1,363

2,898

Rent paid on business property...........................................................................................

120,707

4,028,629

1,730,671

Taxes paid...........................................................................................

154,223

3,431,642

1,705,142

20,717

51,263

414,255

402,818

563,356

636,499

721,580

604,297

10,764

10,265

Interest paid...........................................................................................

67,721

5,565,708

Amortization...........................................................................................

20,995

326,929

3,860,178

220,438

812,742

86,605

1,173,298

42,585

1,663,994

29,793

188,979

61,194

21,164

261

Depreciation...........................................................................................

81,610

4,129,305

Depletion...........................................................................................

-3,461

728,561

*1,733

38,443

175,271

*1,514

263,366

176

242,685

*39

8,797

Advertising...........................................................................................

54,662

1,836,798

Pension, profit-sharing, stock

765,989

27,522

353,746

150,508

229,284

4,930

bonus, and annuity plans...........................................................................................

43,563

810,594

547,254

Employee benefit programs...........................................................................................

40,984

1,069,414

606,682

9,600

27,703

46,849

85,665

278,047

188,674

203,115

301,927

*9,642

2,713

Net loss, noncapital assets...........................................................................................

*60

152,101

66,527

Other deductions...........................................................................................

1,032,949

21,588,778

12,388,416

2,654

234,461

7,365

2,954,927

54,807

5,279,882

1,701

3,862,297

-56,850

Total receipts less total deductions...........................................................................................

442,111

10,071,248

6,027,497

466,784

1,049,164

1,954,935

2,458,330

98,284

Net income (less deficit)

from a trade or business...........................................................................................

440,390

9,843,257

5,841,795

417,437

1,042,734

1,839,115

2,446,171

96,338

9,538,677

3,696,883

459,404

41,967

1,885,013

842,279

4,436,421

2,597,305

2,636,915

190,744

120,925

24,587

distributed to shareholders...........................................................................................

67,518

13,255,887

6,003,496

Net income...........................................................................................

713,830

16,302,891

Deficit...........................................................................................

273,440

6,459,634

Portfolio income (less deficit)

32,815

767,641

4,433,628

599,594

169,817

Dividend income...........................................................................................

2,205

479,443

Interest income...........................................................................................

15,967

2,804,152

296,915

1,414,139

1,998

20,577

4,533

249,414

230,401

940,412

53,768

188,818

6,215

14,918

Royalty income...........................................................................................

13,620

66,567

Net short-term capital gain

(less loss)...........................................................................................

*-302

530,430

7,512

*186

7,256

455,884

-35

6,161

438,631

-2,749

13,877

Net long-term capital gain

(less loss)...........................................................................................

*36,028

9,294,990

3,781,797

10,204

507,177

2,774,448

355,169

134,800

Other portfolio income (net)...........................................................................................

-80,304

47,248

171

42,480

*4,589

Real estate rental net income

(less deficit)...........................................................................................

8,496

3,375,200

Net income...........................................................................................

8,540

5,155,499

5,903

69,597

4,442

6,110

-7,318

11,544

3,245

45,056

5,374

6,416

161

471

Deficit...........................................................................................

1,780,299

63,693

1,668

18,863

41,812

1,042

309

Net income (less deficit)

from other rental activity...........................................................................................

216

543,825

5,782

-359

-317

8,206

*-1,588

-161

11,499

5,717

140

499

1,057

*1,374

9,389

1,182

*678

*2,266

236

396

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

516,619

27,018,169

11,856,976

Net income...........................................................................................

773,677

33,083,696

14,338,159

454,335

490,992

1,802,740

2,543,805

6,284,195

7,826,993

3,049,550

3,192,534

266,156

283,834

36,657

741,065

1,542,798

142,984

17,679

Net income...........................................................................................

274

756,960

Deficit...........................................................................................

213,135

Deficit...........................................................................................

257,058

6,065,527

Footnotes at end of table.

2,481,183

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Finance, insurance, real estate, rental and leasing--continued

Professional and business services

Real estate and rental and leasing

Professional, scientific, and technical services

Accounting,

Lessors of

Item

Total

Real

Rental

nonfinancial

estate

and leasing

intangible

services

assets

(75)

(76)

Total

Legal

tax preparation,

services

bookkeeping,

and payroll

services

(73)

(74)

Number of returns...........................................................................................

300,201

271,573

(77)

(78)

(79)

(80)

27,939

*690

505,090

371,152

36,524

26,683

55,666

*2,562

814,939

572,538

50,134

42,893

Total receipts ¹...........................................................................................

57,811,365

40,290,326

17,191,418

*329,621

284,736,355

183,061,921

16,293,836

7,877,724

Business receipts...........................................................................................

54,768,849

38,240,043

Interest on Government obligations:

16,213,535

*315,270

275,909,504

179,673,635

15,161,329

7,826,055

State and local...........................................................................................

42,288

39,442

2,846

Net gain, noncapital assets...........................................................................................

742,647

273,052

469,565

-*30

242,283

593,484

36,036

395,047

5,415

9,630

*139

*722

Number of shareholders...........................................................................................

682,336

624,108

Income and deductions from a trade

or business:

Other receipts...........................................................................................

2,257,581

1,737,789

505,472

*14,320

7,991,085

2,957,203

1,117,462

50,809

Total deductions...........................................................................................

53,767,614

36,936,966

16,523,095

*307,553

264,308,062

168,390,857

13,843,293

6,951,215

Cost of goods sold...........................................................................................

15,915,949

9,276,591

6,406,035

Compensation of officers...........................................................................................

3,411,010

2,888,535

516,071

*233,323

*6,405

103,855,971

25,724,140

58,675,505

20,525,946

645,014

3,839,995

965,134

1,333,800

Salaries and wages...........................................................................................

13,129,737

10,964,627

Repairs...........................................................................................

808,659

441,775

Bad debts...........................................................................................

180,491

119,859

2,147,106

366,125

60,407

*18,004

*759

*225

53,355,669

1,630,003

693,944

34,263,274

894,740

330,682

3,519,572

102,669

23,286

1,915,815

47,804

7,118

Rent paid on business property...........................................................................................

2,297,958

1,434,076

860,383

Taxes paid...........................................................................................

1,726,501

1,232,657

491,781

*3,498

*2,063

8,109,710

9,363,631

5,834,092

5,790,149

757,799

494,835

413,886

318,991

Interest paid...........................................................................................

1,705,531

1,079,614

Amortization...........................................................................................

106,491

60,449

622,639

42,466

*3,278

*3,576

4,457,326

337,604

1,323,408

191,821

91,985

1,823

78,256

20,636

Depreciation...........................................................................................

3,400,744

712,928

Depletion...........................................................................................

1,728

1,711

2,686,609

*1,206

4,032,632

1,973

2,462,816

*40

143,101

95,311

*40

Advertising...........................................................................................

1,070,809

833,929

Pension, profit-sharing, stock

235,527

*1,353

2,626,166

1,760,875

308,091

54,554

bonus, and annuity plans...........................................................................................

263,339

204,196

57,942

Employee benefit programs...........................................................................................

462,733

336,684

125,846

*1,202

*203

2,146,921

3,104,354

1,830,211

2,054,506

226,192

90,404

147,815

111,080

Net loss, noncapital assets...........................................................................................

-85,574

-40,452

-45,122

Other deductions...........................................................................................

9,200,361

7,308,882

1,859,020

-*32,459

-89,585

44,778,435

-61,285

32,391,507

*-583

3,597,943

-5

1,440,971

Total receipts less total deductions...........................................................................................

4,043,750

3,353,360

668,323

*22,067

20,428,293

14,671,064

2,450,543

926,510

Net income (less deficit)

from a trade or business...........................................................................................

4,001,462

3,313,918

665,477

*22,067

20,186,011

14,635,028

2,445,128

926,371

1,341,907

676,431

*26,596

*4,529

26,433,303

6,247,293

18,943,667

4,308,640

2,663,106

217,978

1,022,435

96,064

Portfolio income (less deficit)

distributed to shareholders...........................................................................................

7,252,391

6,258,429

970,135

Net income...........................................................................................

6,764,214

5,395,710

Deficit...........................................................................................

2,762,751

2,081,792

*23,827

10,877,572

5,598,455

90,337

258,709

Dividend income...........................................................................................

182,528

174,789

Interest income...........................................................................................

1,390,014

1,301,733

7,476

84,365

*262

*3,916

337,487

1,360,348

134,996

745,118

19,835

65,722

3,428

88,514

Royalty income...........................................................................................

59,055

31,995

Net short-term capital gain

*17,818

*9,242

83,534

45,320

*47

(less loss)...........................................................................................

74,545

73,309

Net long-term capital gain

(less loss)...........................................................................................

5,513,194

4,652,408

1,238

*-2

-35,424

49,918

1,724

*-500

857,967

*2,819

9,128,803

4,622,145

2,859

167,253

Other portfolio income (net)...........................................................................................

33,056

24,196

*1,271

*7,589

2,823

958

*149

Real estate rental net income

(less deficit)...........................................................................................

3,369,296

3,325,609

Net income...........................................................................................

5,085,902

5,025,009

43,335

60,541

*352

51,009

157,453

64,142

110,486

-616

*1,829

*555

*722

Deficit...........................................................................................

1,716,606

1,699,399

17,206

106,444

46,344

*2,445

*167

Net income (less deficit)

from other rental activity...........................................................................................

538,044

19,071

519,448

*-475

3,294

-3,532

15,860

-6

Net income...........................................................................................

745,461

51,132

694,329

51,529

40,241

15,863

Deficit...........................................................................................

207,418

174,881

*475

48,235

43,773

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

15,161,193

12,917,028

2,198,395

Net income...........................................................................................

18,745,537

15,781,887

2,913,114

*45,771

*50,537

31,117,885

36,809,602

20,294,093

24,211,647

2,550,709

2,764,824

1,185,628

1,251,077

*4,767

5,691,716

3,917,554

214,115

65,449

32,061

Deficit...........................................................................................

3,584,344

2,864,859

Footnotes at end of table.

714,719

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Professional and business services--continued

Professional, scientific, and technical services--continued

Computer

Other

Item

Administrative and support and waste

Architectural,

Specialized

systems

professional,

engineering,

design

design and

scientific,

and related

services

and technical

companies

services

(83)

(84)

services

Management

management and remediation services

Waste

Administrative

Total

management

and support

and

services

remediation

services

(81)

(82)

Number of returns...........................................................................................

49,457

19,242

(85)

(86)

(87)

(88)

58,753

180,493

11,471

122,466

116,389

6,077

94,199

278,763

39,780

202,621

189,392

13,229

Total receipts ¹...........................................................................................

25,651,142

9,287,019

Business receipts...........................................................................................

25,434,965

9,233,037

28,667,716

28,477,953

95,284,483

93,540,296

7,551,971

3,214,870

94,122,464

93,020,999

86,837,813

85,900,828

7,284,651

7,120,171

Interest on Government obligations:

State and local...........................................................................................

2,453

*634

5,152

22,242

186,605

19,642

11,267

8,374

Net gain, noncapital assets...........................................................................................

31,801

*753

35,356

Other receipts...........................................................................................

181,923

52,595

149,255

316,785

1,405,159

65,660

4,084,836

132,777

949,046

108,335

817,383

24,442

131,663

26,740,012

10,457,658

88,618,990

33,860,231

5,945,263

314,331

89,971,942

44,866,135

83,274,906

42,231,123

6,697,036

2,635,011

Compensation of officers...........................................................................................

2,805,359

761,422

2,687,424

Salaries and wages...........................................................................................

5,255,182

785,985

5,745,770

9,097,946

17,040,951

453,487

770,958

4,744,707

18,321,437

4,456,018

17,477,474

288,689

843,963

98,151

34,147

456,545

196,277

73,366

233,450

661,897

129,811

508,316

115,364

153,581

14,447

Rent paid on business property...........................................................................................

824,082

238,756

669,074

Taxes paid...........................................................................................

952,188

185,148

917,587

2,930,494

2,921,400

93,058

178,495

2,182,560

3,394,987

1,953,418

3,121,211

229,142

273,776

Number of shareholders...........................................................................................

82,887

23,663

Income and deductions from a trade

or business:

Total deductions...........................................................................................

23,582,373

8,654,974

Cost of goods sold...........................................................................................

7,703,215

5,044,252

Repairs...........................................................................................

147,301

42,269

Bad debts...........................................................................................

44,329

25,525

Interest paid...........................................................................................

182,753

36,537

Amortization...........................................................................................

15,986

7,083

214,457

21,570

719,420

124,722

2,485,355

18,827

648,562

126,956

511,549

100,133

137,014

26,823

Depreciation...........................................................................................

423,457

129,390

Depletion...........................................................................................

--Advertising...........................................................................................

80,774

94,894

384,382

-259,485

1,287,176

-963,077

173,649

54,219

1,396,167

1,874

811,072

1,010,368

-774,884

385,798

1,874

36,188

Pension, profit-sharing, stock

bonus, and annuity plans...........................................................................................

251,808

76,657

261,937

865,803

44,739

271,971

240,245

31,726

Employee benefit programs...........................................................................................

479,382

49,322

322,592

Net loss, noncapital assets...........................................................................................

1,079

*2,964

798

1,001,725

55,856

98,567

4,716

951,281

23,584

846,101

23,055

105,180

*529

Other deductions...........................................................................................

4,415,476

1,174,768

4,664,981

17,097,368

947,987

11,438,941

9,905,647

1,533,294

Total receipts less total deductions...........................................................................................

2,068,769

632,045

1,927,704

6,665,493

1,606,708

4,150,522

3,562,907

587,615

Net income (less deficit)

from a trade or business...........................................................................................

2,066,316

631,411

1,922,552

6,643,251

1,420,103

4,130,880

3,551,639

579,241

2,790,370

867,818

9,304,375

2,661,124

2,009,237

589,134

5,480,399

1,349,519

4,759,440

1,207,800

720,960

141,719

distributed to shareholders...........................................................................................

147,940

26,605

1,393,906

Dividend income...........................................................................................

19,096

6,389

8,292

3,680,958

77,956

1,285,734

186,578

3,993,383

15,913

1,370,205

13,284

2,623,178

2,629

Net income...........................................................................................

2,397,384

765,998

Deficit...........................................................................................

331,069

134,587

Portfolio income (less deficit)

Interest income...........................................................................................

52,139

20,241

Royalty income...........................................................................................

741

67,280

*36,891

451,221

7,641

329,809

1,880

285,422

*36,335

222,692

*35,934

62,729

401

Net short-term capital gain

(less loss)...........................................................................................

1,706

*-168

-40,408

87,563

-64,268

-21,074

-19,117

-1,957

Net long-term capital gain

(less loss)...........................................................................................

74,237

*491

1,321,852

Other portfolio income (net)...........................................................................................

*-349

3,055,453

829,872

3,676,786

1,117,412

2,559,374

1,124

1,863

*909

*1,394

49,710

92,489

-20,087

31,339

6,954

15,628

4,992

13,476

1,962

2,152

*485

42,778

51,426

8,674

*8,484

190

Real estate rental net income

(less deficit)...........................................................................................

8,129

*5,454

Net income...........................................................................................

8,565

*5,487

Deficit...........................................................................................

436

*32

Net income (less deficit)

from other rental activity...........................................................................................

*141

*201

-19,728

-617

7,442

6,318

1,124

*201

23,732

43,460

3,573

4,189

7,716

273

6,318

1,398

273

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

2,222,525

663,470

3,317,569

Net income...........................................................................................

2,539,688

792,120

4,161,485

10,354,192

12,702,454

2,685,133

3,225,612

8,138,659

9,372,343

4,933,154

6,069,201

3,205,505

3,303,142

2,348,262

540,479

1,233,684

1,136,047

97,637

Net income...........................................................................................

*444

Deficit...........................................................................................

303

---

Deficit...........................................................................................

317,162

128,650

843,916

Footnotes at end of table.

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Education, health, and social assistance

Item

Health care and social assistance

Offices of

Outpatient

Offices of

Total

Educational

Total

services

(89)

(90)

(91)

Number of returns...........................................................................................

155,372

20,527

Miscellaneous

Hospitals,

physicians

other health

care

health care and

nursing,

and dentists

practitioners

centers

social

and residential

assistance

care facilities

(92)

(93)

(94)

(95)

(96)

134,844

55,822

37,462

3,904

26,698

10,958

214,963

76,123

56,167

5,387

50,638

26,648

80,739,816

32,678,449

14,396,018

1,980,342

12,295,838

19,389,169

78,953,489

31,670,350

14,295,896

1,872,872

12,239,479

18,874,893

Number of shareholders...........................................................................................

248,508

33,545

Income and deductions from a trade

or business:

Total receipts ¹...........................................................................................

91,158,268

10,418,451

Business receipts...........................................................................................

89,250,909

10,297,420

Interest on Government obligations:

State and local...........................................................................................

10,333

4,361

5,972

*2,790

*342

757

*89

1,994

Net gain, noncapital assets...........................................................................................

103,908

17,936

85,972

Other receipts...........................................................................................

1,793,118

98,735

1,694,383

17,339

987,971

*7,407

92,372

651

106,062

22,987

33,283

37,588

474,695

75,315,590

9,764,849

29,524,623

1,117,732

13,321,591

3,080,894

1,808,323

320,455

11,743,279

2,761,751

18,917,774

2,484,018

Compensation of officers...........................................................................................

12,585,349

730,670

11,854,679

Salaries and wages...........................................................................................

24,402,320

2,608,798

21,793,522

8,265,006

7,675,747

2,383,215

2,641,031

134,499

344,584

756,480

3,866,436

315,480

7,265,724

653,875

294,518

258,925

43,747

83,213

42,052

12,226

*15,326

124,918

96,710

174,593

96,684

Rent paid on business property...........................................................................................

4,868,645

619,995

4,248,650

Taxes paid...........................................................................................

3,622,415

345,065

3,277,349

1,710,744

1,122,673

759,766

450,821

61,748

45,155

558,816

526,322

1,157,576

1,132,378

Total deductions...........................................................................................

85,173,621

9,858,031

Cost of goods sold...........................................................................................

12,054,564

2,289,715

Repairs...........................................................................................

751,853

97,978

Bad debts...........................................................................................

441,340

146,823

Interest paid...........................................................................................

1,128,048

84,109

Amortization...........................................................................................

151,634

15,543

1,043,939

136,091

241,263

53,962

73,452

19,057

24,256

4,434

182,246

23,989

522,723

34,649

Depreciation...........................................................................................

1,427,775

159,419

Depletion...........................................................................................

*965

1,268,356

*965

416,072

*938

142,601

42,499

299,932

*28

367,252

Advertising...........................................................................................

1,111,141

528,112

583,029

Pension, profit-sharing, stock

bonus, and annuity plans...........................................................................................

1,162,887

36,512

1,126,375

213,345

170,173

28,776

85,364

85,370

866,510

135,328

13,685

63,464

47,388

Employee benefit programs...........................................................................................

1,266,875

150,313

1,116,562

Net loss, noncapital assets...........................................................................................

3,581

3,512

284,168

88,639

11,798

173,347

*2,542

558,609

*906

18,149,319

7,253,730

3,251,349

748,883

2,220,933

4,674,424

Total receipts less total deductions...........................................................................................

5,984,646

560,420

5,424,226

3,153,826

1,074,427

172,019

552,559

471,395

Other deductions...........................................................................................

20,194,229

2,044,910

Net income (less deficit)

from a trade or business...........................................................................................

5,974,313

556,059

5,418,254

3,151,036

1,074,085

171,261

552,470

469,401

7,200,754

1,782,500

3,678,391

527,355

1,288,856

214,771

251,489

80,228

1,019,799

467,329

962,219

492,818

distributed to shareholders...........................................................................................

648,073

107,522

540,551

Net income...........................................................................................

7,901,745

700,990

Deficit...........................................................................................

1,927,431

144,931

Portfolio income (less deficit)

182,983

78,089

78,104

32,669

168,706

Dividend income...........................................................................................

18,917

2,958

Interest income...........................................................................................

224,565

44,707

Royalty income...........................................................................................

*4,075

15,959

179,858

3,243

53,719

8,295

18,730

*607

7,492

1,708

18,251

2,105

81,666

Net short-term capital gain

(less loss)...........................................................................................

-10,449

-89

-10,360

*-10,220

*-481

*-107

*208

*242

Net long-term capital gain

(less loss)...........................................................................................

410,964

55,872

355,092

136,241

51,545

70,113

*12,502

84,690

25,454

27,901

*4176

*4,704

*5,133

*1,864

*358

13,923

15,842

2,447

*528

*1,919

Other portfolio income (net)...........................................................................................

-Real estate rental net income

(less deficit)...........................................................................................

28,364

2,909

Net income...........................................................................................

32,093

*4,192

Deficit...........................................................................................

3,730

*1,283

Net income (less deficit)

from other rental activity...........................................................................................

4,130

111

4,019

*3,312

162

*544

*4,221

*203

*3,369

*57

---

162

*690

*146

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

6,654,880

666,602

5,988,278

Net income...........................................................................................

8,410,421

785,075

7,625,347

3,341,508

3,826,270

1,157,307

1,343,907

251,229

294,054

585,660

1,042,836

652,574

1,118,279

484,763

186,600

42,825

457,176

465,705

Net income...........................................................................................

4,333

111

Deficit...........................................................................................

*203

Deficit...........................................................................................

1,755,541

118,472

Footnotes at end of table.

1,637,069

S Corporation Returns, 1998

Table 1.--S Corporations: Total Income and Deductions, Portfolio Income, Rental Income and Total

Net Income, by Industrial Division, Sector, and Major Group--Continued

[All figures are estimates based on samples--money amounts are in thousands of dollars]

Leisure, accommodation, and food services

Arts, entertainment, and recreation

Other arts,

Amusement,

Item

Total

entertainment,

gambling, and

and

recreation

industries

(99)

(100)

Total

(97)

(98)

Number of returns...........................................................................................

201,973

Accommodation and food services

Food

Accom-

services

Total

modation

and drinking

(101)

(102)

places

(103)

54,882

27,128

27,754

147,091

21,995

125,096

109,006

44,167

64,838

309,876

58,621

251,256

Total receipts ¹...........................................................................................

126,970,449

26,507,127

10,718,542

15,788,586

100,463,322

16,365,277

84,098,045

Business receipts...........................................................................................

123,569,886

25,300,285

10,133,326

15,166,959

98,269,601

15,787,255

82,482,346

Number of shareholders...........................................................................................

418,882

Income and deductions from a trade or business:

Interest on Government obligations:

9,136

4,040

5,096

8,332

5,267

3,065

Net gain, noncapital assets...........................................................................................

707,386

208,181

State and local...........................................................................................

17,468

19,386

188,795

499,205

76,438

422,767

Other receipts...........................................................................................

2,675,710

989,525

561,790

427,735

1,686,184

496,317

1,189,868

Total deductions...........................................................................................

123,082,716

25,439,167

10,349,891

15,089,276

97,643,549

16,012,068

81,631,481

35,410,320

5,526,669

2,093,580

3,433,089

38,708,415

3,298,094

Compensation of officers...........................................................................................

5,014,789

2,036,317

Cost of goods sold...........................................................................................

44,235,084

1,336,319

699,998

2,978,472

456,815

2,521,657

Salaries and wages...........................................................................................

23,240,154

2,591,645

2,911,884

17,736,625

2,879,102

14,857,523

1,383,127

5,503,528

Repairs...........................................................................................

2,536,700

588,909

82,841

506,067

1,947,792

564,665

Bad debts...........................................................................................

224,019

39,401

13,161

26,240

184,618

113,387

71,231

Rent paid on business property...........................................................................................

8,043,320

1,624,068

379,552

1,244,516

6,419,251

810,810

5,608,441

Taxes paid...........................................................................................

5,688,726

1,296,928

327,226

969,702

4,391,797

1,048,035

3,343,762

Interest paid...........................................................................................

3,042,527

711,988

155,966

556,022

2,330,540

1,240,897

1,089,643

Amortization...........................................................................................

591,629

193,789

134,418

59,372

397,839

85,583

312,256

Depreciation...........................................................................................

4,302,753

1,238,433

259,885

978,548

3,064,320

1,164,485

1,899,836

Depletion...........................................................................................

Advertising...........................................................................................

3,313,790

560,386

167,699

392,687

2,753,404

385,622

2,367,782

bonus, and annuity plans...........................................................................................

203,083

119,788

67,271

52,516

83,295

14,245

69,050

Employee benefit programs...........................................................................................

778,290

193,727

59,043

134,684

584,563

112,924

471,640

Pension, profit-sharing, stock

Net loss, noncapital assets...........................................................................................

119,058

3,098

*780

2,318

115,960

8,619

107,341

5,802,137

2,680,506

3,121,631

15,946,657

3,828,785

12,117,872

Total receipts less total deductions...........................................................................................

3,887,734

1,067,961

368,650

699,310

2,819,773

353,209

2,466,564

Other deductions...........................................................................................

21,748,794

Net income (less deficit)

from a trade or business...........................................................................................

3,870,265

1,058,824

364,610

694,214

2,811,441

347,942

2,463,499

Net income...........................................................................................

8,765,224

2,862,102

1,297,195

1,564,907

5,903,122

1,267,382

4,635,740

Deficit...........................................................................................4,894,958

1,803,278

932,585

870,693

3,091,681

919,440

2,172,241

distributed to shareholders...........................................................................................

1,472,298

756,172

437,578

Portfolio income (less deficit)

577,876

178,295

716,127

278,549

Dividend income...........................................................................................

48,931

20,395

12,523

7,872

28,536

14,290

14,245

Interest income...........................................................................................

517,420

167,345

75,191

92,154

350,075

195,886

154,189

Royalty income....

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