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Pass-Through Entities Held by Trusts


Cost Free
Presentation Length 1.5 hours

Recorded DateSeptember 20, 2022
CPE:Not available
(archived webinars do not offer CPE credits)
Subject AreaTaxes
Course LevelBasic
Course Description

This course delves into the consequences of trusts owning interests in S corporations and partnerships.

First, we will discuss which trusts are eligible to hold S corporation stock and how they are taxed. Next, we will discuss how K-1 income and distributions can have a mismatch and what to do about that mismatch. Then we will discuss planning for the passive loss rules and net investment income (NII) tax. Finally, we will discuss how to plan for and manage the sale of a pass-through entity.

Learning Objectives:

  • Identify trusts that can hold S corporation stock—including grantor trusts, qualified subchapter S trusts (QSSTs), and electing small business trusts (ESBTs)—and the deadlines for QSST and ESBT elections

  • Determine what to do when the deadline is missed

  • Identify how K-1 income can get trapped inside a trust and how to deal with paying taxes and beneficiaries' demands for income

  • Recall the rules for passing depreciation deductions to beneficiaries, even when that exceeds income distributed to them

  • Determine how trustee material participation works, including what the Frank Aragona Trust case did and did not say

  • Determine QSST taxation when an S corporation is sold and general income tax consequences when a non-grantor trust or estate reports the sale of a business

Not logged
Thompson coburn llp

Steve has drafted trusts and a full range of estate planning documents for clients to help grow, preserve, and transmit their family wealth. He has also prepared organizational documents for limited liability companies, corporations, and partnerships to implement their owners' wishes regarding current and future control and transmission, including bringing in new owners and facilitating exit strategies. 
Steve enjoys helping clients structure their affairs to achieve their personal, business, and financial goals while reducing the drag that taxes imposed on them. His firm provides full service to businesses; however, he also acts as counsel on specialized matters while cooperating and facilitating the continued involvement of an existing legal, accounting, and financial services team. Steve maintains his CPA license but prefers to refer income tax returns to practicing CPAs.

Steve Gorin is the former president and an ongoing contributor to Covenant Place’s strategic initiatives. It is a senior affordable housing community with a groundbreaking model for integrated residents with the surrounding community and facilitating holistic services to enrich their lives. 
To know more about Steve Gorin, kindly click on the link below:
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About Our Presenter

Thompson coburn llp

For approximately 90 years, Thompson Coburn LLP has provided the quality legal services and counsel our clients demand to achieve their most critical business goals. Whether helping with a tax, estate planning, real estate or employment issue, navigating a complex acquisition or defending a product or service in litigation, we have the knowledge and resources to meet any legal need.

With over 380 attorneys, we have experience in more than 50 areas of the law. Supported by our firm's state-of-the-art technology, lawyers in our Chicago, Dallas, New York, Los Angeles, Southern Illinois, St. Louis and Washington, D.C. offices enjoy a nationwide practice.