S Corporations as Shareholders, LLC Members, and Partners

172 Tax Notes Federal 1713 (2021)

172 Tax Notes Federal 1915 (2021)

Northwestern Public Law Research Paper No. 21-29

49 Pages Posted: 18 Oct 2021

Date Written: October 14, 2021

Abstract

This two-part article focuses on numerous transactional scenarios involving S corporations that have sole or partial ownership interests in other entities, including C corporations, qualified S corporation subsidiaries, single- and multiple-member limited liability companies and partnerships. Part 1 outlines the fundamentals of how subchapter S operates and examines the tax treatment of transactions through which the S corporation comes into existence, other entities become affiliated with the S corporation group, and cash or other property is transferred from an affiliate to the S corporation or to another affiliate. Part 2 examines the tax consequences of transactions in which a complete or partial interest in an affiliate is sold or otherwise disposed of by the S corporation, including through a taxable stock or assets acquisition, a tax-free reorganization under section 368 or a tax-free corporate separation under section 355.

Keywords: S corporation, Q-Sub, disregarded entity, pass-through entity

JEL Classification: k10, k19, k20, k29

Suggested Citation

Beller, Herbert N., S Corporations as Shareholders, LLC Members, and Partners (October 14, 2021). 172 Tax Notes Federal 1713 (2021) , 172 Tax Notes Federal 1915 (2021), Northwestern Public Law Research Paper No. 21-29, Available at SSRN: https://ssrn.com/abstract=3942475

Herbert N. Beller (Contact Author)

Northwestern University - Pritzker School of Law ( email )

375 East Chicago Avenue
Chicago, IL 60611
United States

Sutherland Asbill & Brennan LLP ( email )

700 Sixth St., NW
Washington, DC 20001
United States
(202) 383-0120 (Phone)

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