ESBTs, QSSTs and Other S Corporation Allowed Trusts: How Trusts Can be Used as S Corp Shareholders

Author: Steven G. Siegel

This two-hour online CPE course provides a helpful review of the types and uses of trusts that may serve as shareholders of an S corporation, with special emphasis on the Electing Small Business Trust (ESBT) and the Qualified Subchapter S Corporation Trust (QSST). Presented by noted estate planner, author and educator, Steven G. Siegel, J.D., LL.M., this program offers a clear and concise review of the different types of S allowed trusts, how they are taxed, steps necessary to secure the desired treatment, permitted beneficiaries, how to report their income, planning ideas for different situations, and more.

Siegel, an outstanding speaker and presenter, will provide helpful explanations and tips on this important topic, so you can advise your clients with confidence.

All accountants, attorneys and financial planners who advise clients on tax and estate planning and other wealth management matters will benefit from this insightful seminar. During the program, time will be provided to ask questions directly to Mr. Siegel.

Publication Date: August 2019

Designed For
This course is essential for tax return preparers, CPAs, CFPs, enrolled agents, tax attorneys and other professionals who advise clients on tax, retirement and estate planning, and other wealth management matters.

Topics Covered

• What is an ESBT? What are its required provisions?
• How is the trust taxed and what are the reporting requirements?
• How are the trust beneficiaries taxed?
• Permitted beneficiaries of an ESBT
• What elections are required?
• How are the non-S corporation assets owned in an ESBT treated?
• Planning with ESBTs
• Converting an ESBT to a QSST and a QSST to an ESBT
• What is a QSST? What are its required provisions?
• What elections are required?
• Who are the permitted beneficiaries?
• Coordination of QSSTs with the Grantor Trust rules
• How are the QSST and its beneficiaries taxed?
• Planning with QSSTs
• Reporting requirements
• Other Trusts as S Corporation Shareholders
• Grantor Trusts
• Beneficiary-controlled Trusts
• Testamentary Trusts
• Voting Trusts

Learning Objectives

• Recognize and apply a comprehensive basic understanding of trusts that can be used as S corporation shareholders
• Identify how S corp allowed trusts operate and how they are taxed
• Describe key compliance and reporting requirements ESBTs and QSSTs
• Recognize how to plan for key compliance and reporting issues under the new Net Investment Income Tax
• Identify planning opportunities for clients to use trusts as S shareholders
• Recognize benefits represent the primary purpose of establishing a trust
• Describe a Grantor Trust
• Identify when a trust is required to distribute, under the QSST rules
• Differentiate issues regarding charitable contributions of a QSST
• Describe the effective date that a nonresident alien individual (NRA) may be a potential current beneficiary of an ESBT, under the 2017 Tax Cuts and Jobs Act
• Differentiate the three possible reasons a trust might have two or three taxpayer identification numbers, for the purposes of measuring the taxable income of the trust and that of the beneficiaries
• Recognize which form of business entity has become the most popular choice for closely held entities that wish to be organized as a corporation
• Identify which trust qualifies to hold stock in an S Corporation
• Recognize how many years the post-death hold period was expanded to for grantor trusts
• Describe a trust instrument that must provide only one current income beneficiary during the life of the current income beneficiary
• Recognize the S Corporation shareholder limit
• Identify true statements about The Electing Small Business Trust (ESBT)

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Basic knowledge of S corporation taxation and taxation of trusts

Advance Preparation
None