Consider the factors that determine whether a QSUB election should be made. Discuss topics covering both immediate and long-term tax consequences and the process necessary to make the election.
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). We’ll examine the tax compliance requirementsnecessary to successfully make the QSUB election.
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.
Understand tax consequences of termination of QSUB election
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 QSUBelection could be desirable.
Situations where the QSUB election could be undesirable.
Longer term consequences of the decision to elect or not elect.
Terminations of QSUB election
CPAs and lawyers.
Understanding the basics of the taxation of corporations, and S corporations.