### Question
How does Income Taxes define affected shareholder?


### Answer
Under *26 U.S.C. § 1368*, **affected shareholder** is defined as:

> any shareholder to whom a distribution is made by the S corporation during the taxable year

#### Citation:
  - *26 U.S.C. § 1368*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter S-Tax Treatment of S Corporations and Their Shareholders > PART II-TAX TREATMENT OF SHAREHOLDERS**

