Single owner of large S corp sets up a qualified QSub for each of his two sons. All of the income must be distributed currently for the trust to be a QSub.
Size of each QSub is apprx 19% of the total S corp shares, meaning Dad still owns over 60% of the corporation.
FMV of the corporation prior to creation of the Qsubs was appx $5 million. Each Qsub was worth almost $950,000.
Does Dad need to file a gift tax return for $1.9MM, since the gift was to the trust instead of directly to the children? Mother owned no part of the S corp.
Size of each QSub is apprx 19% of the total S corp shares, meaning Dad still owns over 60% of the corporation.
FMV of the corporation prior to creation of the Qsubs was appx $5 million. Each Qsub was worth almost $950,000.
Does Dad need to file a gift tax return for $1.9MM, since the gift was to the trust instead of directly to the children? Mother owned no part of the S corp.
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