Subchapter S Trust Withdrawal
Description
How to fill out Qualifying Subchapter-S Revocable Trust Agreement?
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FAQ
The first way to take money out of an S Corporation is via payroll. Paying shareholders a "Reasonable Salary" via payroll is a requirement for S Corporations. We highly recommend using a payroll company like Gusto to service an S Corporation payroll.
To qualify as a QSST, the trust must require that all of the net income be distributed to a single beneficiary. While principal of the QSST may also be distributed to the beneficiary in the discretion of the Trustee, the QSST cannot provide for multiple beneficiaries.
Tax Forms Required for Distributions Trustees will need to submit a completed 1041 form (i.e., a trust income tax return) to the IRS in order to deduct from the trust's taxable income the income it distributed to beneficiaries.
The corporation is responsible for telling the shareholder the amount of non-dividend and dividend distributions. Box 16D of Schedule K-1 reflects non-dividend distributions. Form 1099-DIV is used to report dividend distributions; dividends are not reported on the shareholder's Schedule K-1.
To qualify as a QSST, the trust must require that all of the net income be distributed to a single beneficiary. While principal of the QSST may also be distributed to the beneficiary in the discretion of the Trustee, the QSST cannot provide for multiple beneficiaries.