An S-Corporation is a tax election under Subchapter S of the Internal Revenue Code that allows business income to pass through to shareholders' personal tax returns, avoiding double taxation. While S-Corps are not typically the ideal structure for holding rental properties (LLCs are generally preferred), they can be useful for investors who operate property management companies, real estate brokerages, or other service businesses alongside their investment portfolio. The S-Corp structure can reduce self-employment taxes on active income. Investors should consult with a tax professional to determine the optimal entity structure for their specific situation.