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S Corporations - QSUB Elections

Overview

1.0 Credits
IN-PERSON

If an S corporation owns 100% of the stock of another corporation, the tax consequences of the operation of the subsidiary will depend on whether the S corporation makes a "qualified subchapter S subsidiary election" (QSUB election ). Consider the factors that determine whether this election should be made. Discuss topics covering both immediate and long-term tax consequences and the process necessary to make the election.

Materials are provided as an ebook for this course.

Objectives

  • Recognize the immediate and long term tax consequences of making or not making a QSUB election.
  • Identify situations where the QSUB election can be made.
  • Analyze the result of the "deemed liquidation" including unusual facts which can create complications.
  • Discuss situations where the election could be desirable or undesirable.
  • Explain the tax compliance requirements  necessary to successfully make the QSUB election.

Major Topics

  • Requirements that must be satisfied to make the QSUB election.
  • How to make the QSUB election.
  • Immediate tax consequences of election, "deemed liquidation."
  • Potential complications of "deemed IRC 332 liquidation."
  • Situations where the QSUB election could be desirable.
  • Situations where the QSUB election could be undesirable.
  • Longer term consequences of the decision to elect or not elect.

Prerequisite

Understanding the basics of the taxation of corporations, S corporations and partnerships.

Advanced Preparation

None.

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