An Oregon Irrevocable Trust, classified as a Qualifying Subchapter-S Trust, is a legal arrangement that provides individuals with various estate planning benefits and tax advantages. It is important to note that while Oregon recognizes Irrevocable Trusts, it does not specifically have a subtype known as a Qualifying Subchapter-S Trust. However, understanding the features and benefits of a Qualifying Subchapter-S Trust in general can still be relevant for estate planning in Oregon. A Qualifying Subchapter-S Trust, often abbreviated as SST, is a type of trust that meets specific criteria set forth by the Internal Revenue Service (IRS) to qualify as an eligible shareholder of an S-corporation. By designating a trust as an SST, the trust can own shares of an S-corporation without jeopardizing the S-corporation's tax status. This trust structure allows for effective estate planning while ensuring the continuance of favorable tax treatment. Keywords: Oregon Irrevocable Trust, Qualifying Subchapter-S Trust, estate planning, tax advantages, legal arrangement, Oregon, Irrevocable Trusts, Qualifying Subchapter-S Trust, SST, Internal Revenue Service, IRS, eligible shareholder, S-corporation, tax status, estate planning.
Oregon Irrevocable Trust which is a Qualifying Subchapter-S Trust
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How to fill out Oregon Irrevocable Trust Which Is A Qualifying Subchapter-S Trust?
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Net investment income tax of a QSST 1411(a)(2)). The tax also applies to QSSTs to the extent the net investment income is retained in the trust. Although the S corporation income of a QSST is taxed to the individual income beneficiary, capital gain on the sale of the S corporation stock is taxed at the trust level.
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.
TRUSTS COMMONLY USED TO HOLD S CORPORATION STOCK Three commonly used types of ongoing trusts qualify as S corporation shareholders: grantor trusts, qualified subchapter S trusts (QSSTs) and electing small business trusts (ESBTs).
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.
Background. A QSST is one of several types of trusts that are eligible to hold stock in an S corporation. Its two primary requirements are (1) there can be only one beneficiary of the trust and (2) all income must be distributed at least annually (Sec. 1361(d)(3)(B)).
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.
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.
The main difference between an ESBT and a QSST is that an ESBT may have multiple income beneficiaries, and the trust does not have to distribute all income. Unlike with the QSST, the trustee, rather than the beneficiary, must make the election.
Three commonly used types of ongoing trusts qualify as S corporation shareholders: grantor trusts, qualified subchapter S trusts (QSSTs) and electing small business trusts (ESBTs).