26 USC § 1372 - Partnership rules to apply for fringe benefit purposes

---
identifier: "/us/usc/t26/s1372"
source: "usc"
legal_status: "official_prima_facie"
title: "26 USC § 1372 - Partnership rules to apply for fringe benefit purposes"
title_number: 26
title_name: "INTERNAL REVENUE CODE"
section_number: "1372"
section_name: "Partnership rules to apply for fringe benefit purposes"
chapter_number: 1
chapter_name: "NORMAL TAXES AND SURTAXES"
subchapter_number: "S"
subchapter_name: "Tax Treatment of S Corporations and Their Shareholders"
part_number: "III"
part_name: "SPECIAL RULES"
positive_law: false
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Added Pub. L. 97–354, § 2, Oct. 19, 1982, 96 Stat. 1682.)"
---


# § 1372. Partnership rules to apply for fringe benefit purposes

**(a)** **General rule** 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.

**(b)** **2-percent shareholder defined** For purposes of this section, the term “2-percent shareholder” means any person who owns (or is considered as owning within the meaning of section 318) on any day during the taxable year of the S corporation more than 2 percent of the outstanding stock of such corporation or stock possessing more than 2 percent of the total combined voting power of all stock of such corporation.

---

**Source Credit**: (Added Pub. L. 97–354, § 2, Oct. 19, 1982, 96 Stat. 1682.)

## Editorial Notes

### Prior Provisions

A prior section 1372, added , , ; amended , , ; , §§ 2(b)(2), 3(a), , ; , , ; , title XIX, §§ 1901(a)(149), 1906(b)(13)(A), , , 1788, 1834; , , ; , (b), , , related to manner, effect, termination, etc., of an election not to be subject to taxes imposed under this chapter, prior to the general revision of this subchapter by .

## Statutory Notes and Related Subsidiaries

### Effective Date

Section applicable to taxable years beginning after , except that in the case of a taxable year beginning during 1982, sections 1362(d)(3), 1366(f)(3), and 1375 of this title shall apply and subsec. (e)(5) of this section as in effect on the day before , shall not apply, see section 6(a), (b)(3), of , set out as a note under . For additional provisions relating to the treatment of existing fringe benefit plans and the application of this section, see , set out as a note under .