Can s corporation be personal holding company?

Yes, an S corporation can be classified as a personal holding company if it meets certain criteria defined by the Internal Revenue Code. Specifically, it must primarily earn passive income, such as dividends, interest, rents, or royalties, and have a substantial portion of its income coming from these sources. However, S corporations must be cautious, as being classified as a personal holding company can lead to additional taxes on undistributed income.