Restructuring an existing QSub in an attempt to qualify for an ordinary deduction is prohibited and might result in an unfavorable deferral of loss.
IRS addressed whether an S corporation and its wholly owned subsidiary, a QSub, must prorate annual income following a midyear voluntary revocation of subchapter S election.
The Tax Court held that shareholders of an S corporation improperly increased the adjusted basis of their S corporation stock when the S corporation made a QSub election for its wholly owned C corporation subsidiary.
An S corporation’s revocation of its S corporation status, which caused its QSub subsidiary to lose its status as a QSub, was not a post-bankruptcy-petition transfer of property of the QSub’s bankruptcy estate.
During the period of this S corporation tax update, some major changes that directly affect S corporations took place. This article also presents tax planning ideas for S corporations and their shareholders.
A qualified subchapter S subsidiary (QSub) is a subsidiary corporation 100% owned by an S corporation that has made a valid QSub election for the subsidiary.
Temporary and proposed regulations extend the religious and family member FICA and FUTA tax exceptions to disregarded entities.