• videocam On-Demand Webinar
  • signal_cellular_alt Intermediate
  • card_travel Tax Preparer
  • schedule 110 minutes

Trusts as S Corporation Shareholders: Elections, Eligibility, and Avoiding Loss of Subchapter S Status

QSSTs, ESBTs, Grantor Trusts, and Testamentary Trusts

$197.00

This course is $0 with these passes:

CPE
ALL
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About the Course

Introduction

This course will cover types of trusts eligible to hold S corporation shares, including Qualified Subchapter S Trusts (QSSTs) and Electing Small Business Trusts (ESBTs), making the corresponding QSST and ESBT elections, and avoiding common scenarios where S status is inadvertently terminated when a trust holds shares.

Description

Trusts are viable S corporation shareholders. Grantor trusts, testamentary trusts, QSSTs, and ESBTs, are all eligible to hold S corporation shares. Owning S corporation stock through a trust, or transferring the shares to a trust at death, can be an effective method of transferring ownership. IRC Section 645(b)(2) provides a two-year transition period for certain trusts upon the death of an S corporation shareholder.

A QSST can be an S corporation shareholder. A QSST must meet specific criteria, including having a single income beneficiary and distributing all income currently to the said beneficiary. An ESBT could be a better alternative for owners wanting to distribute or accumulate income to multiple beneficiaries, for example, children. Both QSSTs and ESBTs require timely, properly filed elections. Both are allowed to hold property other than the S corporation stock creating a bifurcated reporting obligation.

There are many circumstances involving trusts that can create the inadvertent termination of the S election. These include leaving S corporation stock to an ineligible shareholder (a foreign trust, IRA, NRA) or even including a defective provision in the trust document. Tax advisers working with S corporations and S corporation shareholders need to recognize the caveats of establishing trusts as shareholders of S corporations for living and testamentary trusts.

Listen as our panel of Subchapter S veterans explains the concerns and considerations of having a trust as an S corporation shareholder.

Presented By

John F. DeStafano Jr
Of Counsel
BakerHostetler

Mr. DeStefano raws on his background in private equity finance and portfolio management at a multibillion-dollar foundation to advise public company executives, emerging growth company founders and private investors across the country on building and sustaining a family legacy over multiple generations.

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Jana L. Simons, J.D., LL.M. (Tax), CFP®
Attorney
Meadows, Collier, Reed, Cousins, Crouch & Ungerman, LLP

Ms. Simons represents individuals and multi-generational families. She primarily focuses on tax planning, drafting complex wills and trusts, implementing wealth preservation strategies, and charitable giving.

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Christopher C. Weeg
Partner, Co-Chair Estate Planning Department
Comiter Singer

Mr. Weeg is Co-Chair of the firm’s Estate Planning Department. He is Board Certified in both Tax Law and in Wills, Trusts and Estates, distinguishing him as one of twenty-nine Florida lawyers who hold dual certification in those areas of law. As both a double Board-Certified lawyer and a CPA, Mr. Weeg offers a broad depth of knowledge for his clients. His core law practice includes creating comprehensive estate plans tailored to meet clients’ personal objectives in a tax efficient manner, representing fiduciaries in probate and trust administration, and advising on income, gift, estate, and GST tax issues. Mr. Weeg currently serves on the Board of Directors of the East Coast Estate Planning Council and the Palm Beach Tax Institute. He is a Director of the Tax Section of the Florida Bar and is a Member of the Florida Bar Tax Law Certification Committee. Mr. Weeg frequently writes and presents on emerging and technical topics in tax and estate planning. He is also a co-author of the Florida Trusts chapter in Trust Laws in the United States, a treatise published by Globe Law and Business.

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Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Date + Time

  • event

    Monday, June 10, 2024

  • schedule

    1:00 p.m. ET./10:00 a.m. PT

  1. Trusts as S corporation shareholders: overview
  2. Trust eligibility
  3. QSSTs
  4. ESBTs
  5. Practical considerations
  6. Avoiding inadvertent terminations of S status

The panel will review these and other critical issues:

  • General reporting requirements and bifurcated reporting when a QSST or ESBT holds other assets
  • Properly filing QSST and ESBT elections
  • Eligibility requirements for a QSST and ESBT
  • Trust language to avoid jeopardizing S corporation status

Learning Objectives

After completing this course, you will be able to:

  • Recognize various types of trusts eligible to be S corp shareholders
  • Verify that QSSTs and ESBTs are properly and timely filed
  • Distinguish between QSSTs and ESBTs
  • Avoid the inadvertent termination of S status
  • Determine the best method of obtaining relief from inadvertent S corp terminations
  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and their respective partners and shareholders.

BARBRI, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

BARBRI CE webinars-powered by Barbri-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .