October 15, 2019 - Bottled Business Sense Show

Issues with Living Trusts that Own S-Corporation Stock

Although a trust can be a permitted shareholder in an S corporation, only certain kinds of trusts are so permitted under Section 1361 of the Internal Revenue Code. If a trust is not one of the trusts specifically authorized by the Internal Revenue Code, however, and becomes a shareholder, the Corporation ceases to be a qualified S corporation and will be taxed as an ordinary C corporation. Thus, when a Living Trust becomes the owner of S corporation stock, there can be resulting difficulties for both the Grantor’s heirs and for the S corporation itself if an estate lawyer is not involved.

Learn more in this episode of The Bottled Business Sense Show.

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WFB LEGAL CONSULTING–LAWYER FOR BUSINESS–A BEST ASSET PROTECTION Services Group