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Trusts Holding S Corporation and Partnership Interests: Legal and Tax Considerations

Beneficiaries of Business Interests, QSSTs vs. ESBTs, Avoiding State Income Tax Traps, Real Estate, Planning for the 3.8% NIIT

Recording of a 90-minute CLE/CPE video webinar with Q&A

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Conducted on Thursday, October 31, 2024

Recorded event now available

or call 1-800-926-7926

This CLE/CPE webinar will provide estate planners and tax professionals guidance for navigating the legal and tax implications of trusts holding interest in pass-through entities. The panelist will discuss planning for trusts holding S corp stock and other pass-through entities, basis step-up in a partnership's assets, avoiding issues regarding beneficiaries of business interests, planning for the 3.8% net investment income tax, and other key issues.

Description

Using trusts to hold interests in partnerships and S corporations provides significant tax advantages under current tax law. However, structuring these trusts involves a high level of complexity requiring an in-depth knowledge of applicable federal and state rules that must be considered.

Succession, shareholder agreements, valuation, post-mortem planning, and basis considerations are some of the challenges of developing an estate plan for owners of S corporations and partnerships. Holding S corporations and partnerships in a trust can provide significant tax and estate planning benefits, but structuring them incorrectly may disrupt cash flow and result in unforeseen tax consequences.

For estate planning purposes, trusts and estates counsel must recognize the impact of eligibility rules for S corps and partnerships, key tax provisions, and reporting and administrative challenges to implement methods to minimize tax liability and achieve the goals of an estate plan.

Listen as Mark A. Kassens, CPA, Shareholder at Brady Ware, provides techniques for drafting the various types of trusts, including grantor, testamentary, QSSTs, and ESBTs, as well as offers methods to overcome common tax and estate planning challenges involving trusts holding S corp and partnership interests.

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Outline

  1. Advantages and disadvantages of trusts holding S corp and partnership interests
  2. Qualified shareholders and eligibility rules for S corps
  3. Challenges of S corp ownership interests in estate planning
  4. Evaluating current trust structures to see if they still achieve optimal tax benefits
  5. Application of Section 199A and the 20 percent deduction on qualified pass-through business income
  6. Transfers of S corp and partnership interests
  7. Navigating reporting and administrative issues

Benefits

The panelist will review these and other key issues:

  • Critical guidance on qualified shareholders of S corporations for trusts and estates counsel
  • Principal challenges of S corp and partnership interests in estate planning and methods to overcome them
  • Identifying issues in current trust structures and making modifications for optimal tax benefits
  • The application of the 20 percent deduction on qualified pass-through business income
  • Differences in tax treatment between an ESBT and a QSST holding S corporation stock
  • Essential considerations for transfers of S corporation and partnership interests

Faculty

Kassens, Mark
Mark A. Kassens, CPA
Shareholder
Brady Ware

Mr. Kassens has been a shareholder since January 2019, he contributes technical expertise and a dedication to client...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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