### Question
How is the "shareholder-employee" defined?


### Answer
The term **shareholder-employee** is defined in *26 U.S.C. § 4975* as follows -

> an employee or officer of an S corporation who owns (or is considered as owning within the meaning of section 318(a)(1)) more than 5 percent of the outstanding stock of the corporation on any day during the taxable year of such corporation

#### Citation:
  - *26 U.S.C. § 4975*
  - Heading: **Subtitle D-Miscellaneous Excise Taxes > CHAPTER 43-QUALIFIED PENSION, ETC., PLANS**

