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In order to be so qualified the income beneficiary of the trust must be the sole trust beneficiary entitled to all of the trust income currently. The qsst may be useful for estate planning purposes.

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One of these the qualified subchapter s trust qsst is modeled after the grantor trust.

Qualified subchapter s trust. Article 3 of the form is designed to satisfy this and all of the other statutory requirements of a qualified subchapter s trust qsst. Qssts are different than other other s corporation trusts in that the beneficiary is usually someone other than the grantor of their estate. It is eligible to hold stock in an s corporation and under the s corporation rules it is treated as a subpart e trust sec.

Qualified subchapter s trusts are oftentimes used by donors to plan for the eventual transfer of subchapter s stock to a single heir after their death. The term qualified subchapter s trust refers to one of the two trusts that can hold subchapter s corporation stock. The corporate income tax return form 1120s u s.

Income tax return for an s corporation shows all the income for the year and then splits it among all the shareholders on schedule k 1. And all of the trust s accounting income must either be required by the terms of the trust instrument to be distributed or actually be distributed to the income beneficiary at least annually. Abstract qualified subchapter s trusts qssts can provide tax payers with substantial income tax and estate tax savings.

Qualified subchapter s trusts qssts in a subchapter s corporation the shareholders not the corporation pay the income tax on income the corporation earns. 1361 d 3 for a trust to qualify as a qsst its terms must require that during the life of the current income beneficiary the trust will have only one income beneficiary.