• videocam Live Webinar with Live Q&A
  • calendar_month June 12, 2026 @ 1:00 PM ET/10:00 AM PT
  • 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

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About the Course

Introduction

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

Description

Certain trusts are viable S-corporation shareholders. Owning S corporation stock through a trust, or transferring the shares to a trust at death, can be an effective method of transferring ownership. Internal Revenue Code 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 among multiple beneficiaries, for example, a beneficiary and children. Both QSSTs and ESBTs require timely, properly filed elections made with the Internal Revenue Service. Both types of trusts are allowed to hold property other than the S-corporation shares, creating a bifurcated reporting obligation.

There are many circumstances involving trusts that can create the inadvertent termination of the appropriate election. These include leaving S-corporation shares to an ineligible shareholder (i.e., a foreign trust, individual retirement account, or non-resident alien) or even including a defective provision in the trust document. Tax advisers working with S-corporations and their shareholders need to recognize the caveats of establishing trusts as shareholders of S-corporations.

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

Presented By

Brian M. Balduzzi
Attorney
Faegre Drinker Biddle & Reath LLP

Mr. Balduzzi started his legal career as a tax attorney for a mid-sized accounting firm, preparing federal and state tax forms for high net-worth individuals and counseling them on their family, corporate and partnership tax planning. He transitioned to a mid-sized law firm as a tax and estate planning attorney for technology entrepreneurs, intergenerational wealth-holders, and real estate developers before deepening his financial acumen by getting his MBA at Cornell University. Mr. Balduzzi integrated his financial and legal experiences while working at a leading trust company and financial services firm, starting as a fiduciary innovation strategist before being promoted to assistant vice president and operational and planning innovation manager.


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

Mr. Weeg, partner with Comiter Singer, is Board Certified in both Tax Law and in Wills, Trusts and Estates and is also a licensed CPA. His law practice includes drafting wills and trusts; advising on income, gift, estate, and GST tax issues; forming business and nonprofit entities; and probating estates. Mr. Weeg is experienced in the preparation of gift and estate tax returns, representation of executors in all phases of estate administration, and creating comprehensive estate plans tailored to meet clients’ personal objectives in a tax efficient manner. He is licensed to practice law in Florida and Texas.

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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

    Friday, June 12, 2026

  • schedule

    1:00 PM ET/10:00 AM PT

I. Trusts as S-corporation shareholders: overview

II. Trust eligibility

III. QSSTs

IV. ESBTs

V. Practical considerations

VII. Avoiding inadvertent terminations of S-corporation status

The panel will review these and other critical issues:

  • Eligibility requirements for a QSST and ESBT
  • General reporting requirements and bifurcated reporting when a QSST or ESBT holds other assets
  • Properly filing QSST and ESBT elections
  • 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 .