For purposes of applying the provisions of this subtitle which relate to employee fringe benefits—
(1) the S corporation shall be treated as a partnership, and
(2) any 2-percent shareholder of the S corporation shall be treated as a partner of such partnership.
For purposes of this section, the term “2-percent shareholder” means any person who owns (or is considered as owning within the meaning of section 318) on any day during the taxable year of the S corporation more than 2 percent of the outstanding stock of such corporation or stock possessing more than 2 percent of the total combined voting power of all stock of such corporation.
(Added Pub. L. 97–354, § 2, Oct. 19, 1982, 96 Stat. 1682.)
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