Explain the principal difference in the tax treatment of an S corporation and a C corporation. A C Corporation is $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ and for tax purposes is considered $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ An S Corporation is $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.$ Its income $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$ Each shareholder reports his or her share of the income $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.$