Sacramento California Qualifying Subchapter-S Revocable Trust Agreement

Name: Sacramento California Qualifying Subchapter-S Revocable Trust Agreement
Brand: US Legal Forms
Rating: 4.76 (350 reviews)

Category:

Trusts - Revocable

State:

Multi-State

County:

Sacramento

Control #:

US-0687BG

Format:

Instant download

Description

Qualified Subchapter S trusts (QSSTs) can provide taxpayers with substantial income tax and estate tax savings. QSSTs are different than other S corporation trusts in that the beneficiary is usually someone other than the grantor of their estate.

How to fill out Sacramento California Qualifying Subchapter-S Revocable Trust Agreement?

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FAQ

An irrevocable trust that is setup as a grantor trust, qualified subchapter S trust or as an electing small business trust may own shares of an S corporation.

You can put your S-Corp into your living trust by simply transferring your shares ownership to yourself as trustee of your living trust, but again, there are certain procedures that must be strictly followed....These trusts include: Electing small business trusts (ESBT) Grantor trusts. Qualified subchapter S trusts (QSST)

The fundamental problem is that trusts and S corporations do not play well together. Although a trust (including a Living Trust) can be a permitted shareholder in an S corporation, only certain kinds of trusts are so permitted under Section 1361 of the Internal Revenue Code.

The Internal Revenue Code specifies broad categories of trusts that qualify as S shareholders. One of these, the qualified Subchapter S trust (QSST), is modeled after the grantor trust. It is eligible to hold stock in an S corporation, and, under the S corporation rules, it is treated as a Subpart E trust (Sec.

As an initial matter, as long as the business owner is living, his or her revocable trust is treated as a grantor trust for income tax purposes, and as such, is an eligible S corporation shareholder.

In the most common scenario, in order for a grantor trust, such as a joint revocable trust, to remain an S-corporation shareholder, the trust should allow for the distribution of the S-corporation stock to a permissible shareholder within two years after your death.

Testamentary trusts. This trust type is established by your will. It's an eligible S corporation shareholder for up to two years after the transfer and then must either distribute the stock to an eligible shareholder or qualify as a QSST or ESBT.

A trust can hold stock in an S corp only if it (1) is treated as owned by its grantor for income tax purposes under us grantor trust rules, (2) was a grantor trust immediately before its grantor's death (the trust can be a shareholder only for two years from that date), (3) received stock from the will of a decedent (

An irrevocable grantor trust can own S corporation stock if it meets IRS regulations. The trust must contain language stating that all the ordinary income the trust earns along with the original trust assets are owned by the trust grantor.

A Qualified Subchapter S Trust, commonly referred to as a QSST Election, or a Q-Sub election, is a Qualified Subchapter S Subsidiary Election made on behalf of a trust that retains ownership as the shareholder of an S corporation, a corporation in the United States which votes to be taxed.

Sacramento California Qualifying Subchapter-S Revocable Trust Agreement

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Is a Qualified Subchapter S trust irrevocable?

How do I transfer my S Corp shares to a trust?

Can you put an S Corp into a trust?

What is a qualified Subchapter S trust provision?

Can an S corp be owned by a revocable trust?

Can a joint revocable trust own S Corp stock?

What type of trust can be an S Corp shareholder?

Can a trust own a Scorp?

Can S Corp be own by irrevocable trust?

What is a qualified subchapter S trust?

Interesting Questions

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