A qualified subchapter S trust
can have only one beneficiary at a time, although successive beneficiaries can be designated.
The same is true when filing a qualified subchapter S trust
Thus, the S election of the corporation whose stock is held by the ESBT will terminate if the distributee trust itself does not qualify as an eligible S shareholder (e.g., as an ESBT, a grantor trust or a qualified subchapter S trust
Section 4.02 involves the situation in which the failure to timely file the Form 2553 is compounded by a failure of a trust shareholder to qualify either as an electing small business trust (ESBT) or as a qualified subchapter S trust
(QSST) on the S corporation's first day, or by a failure to qualify as a qualified subchapter S subsidiary (QSub).
1.1361-1(j)(7)(i) provide that a beneficiary of a qualified subchapter S trust
(QSST) is treated as the owner of that portion of the trust that consists of S stock.
Two of those trusts are qualified subchapter S trusts
(QSSTs) and electing small business trusts (ESBTs).
The rules also permit suspended losses to be used by beneficiaries of qualified subchapter S trusts
. Practitioners who represent small C corporations may want to consider an S corporation option.
Under prior law, a trust generally was not permitted to own stock in an S corporation, although certain trusts such as qualified subchapter S trusts
(QSSTs) were--and remain--eligible.
I know qualified subchapter S trusts
(QSSTs) cm be S corporation shareholders.
Disclaimers ma be used to qualify trusts, corporation stock as qualified subchapter S trusts
, which generally involve more stringent rules and requirements.
Three types of trusts basically qualify--grantor trusts, qualified subchapter S trusts
(QSSTs) and ESBTs; see Sec.
2003-43 also applies to late-filing requests for qualified subchapter S subsidiaries (QSubs), electing small business trusts (ESBTs) and qualified Subchapter S trusts