Subchapter S Corporations

S Corporations are pass-through entities that are generally nontaxable, but can also be taxable entities for certain purposes. The bankruptcy of a tier or pass-thru partner will have its own partnership items converted to nonpartnership items while any items of income, gain, losses, deductions and credits that flow through the S Corporations will remain partnership items. The bankruptcy of a tier, or pass-thru partner, will only affect its own taxable partnership items. It will not affect the underlying indirect investors.