Taxation Assignment
Reading
The primary text for this course is: Practical Guide to S Corporations, 5e, CCH Inc.
ISBN: 9780808025719
1120S Express Answers (2012) [Spiral-bound], CCH Inc.
ISBN: 9780808027164
Lesson 2: Qualifying Trusts and Filing of an S
Corporation Election and Tax Return
This lesson takes the student through the logical steps required to file an S Corporation election
and tax returns. Students will gain an understanding of the various forms and processes involved
in making this election and filing for tax treatment. This lesson also explores trusts that qualify
as S Corporation shareholders and the guidelines that apply to these situations.
Lesson Objectives
At the end of this lesson, you should be able to:
• Demonstrate how trusts qualify as subchapter S trusts.
• Review the different types of trusts that might qualify and the guidelines for each to fully
qualify as a shareholder of an S Corporation.
• Be able to walk through how to elect the Subchapter S Corporate form.
• Understand the process for filing taxes as an S Corporation.
Reading
Study the following readings:
• Practical Guide to S Corporations, 5/E: Chapters 3 - 4
• 1120S Express Answers: review index for sections pertaining to trusts.
Assignments
NOTE: List the question first, and then your response. In most cases, your responses
should be no more than 500 words.
Be sure to properly cite your sources, both in-text and with a reference list at the
conclusion.
If you use an online source to support your answers, you must provide a properly
formatted link to the source. Make sure your sources are credible.
Short Answer Questions
1. List and discuss the six different types of eligible trusts that exist.
2. Explain what grantor trusts are and the advantages as well as disadvantages as a potential
shareholder.
3. Explain what voting and electing small business trusts are and their advantages as a potential
shareholder in an S Corporation would be.
4. What are qualified subchapter S Trusts (QSSTs)? Explain the qualifications of this form of
trust.
5. Discuss the overall shareholder consent process and the guidelines that must be met in order
to gain full approval from shareholders.
6. Who must sign a shareholders S consent statement and how does this process typically
evolve?
7. Explain the considerations that need to be considered when converting a C Corporation to an S
Corporation.
8. Discuss the process and steps needed in filing an S Corporate tax return.
Professional Development Questions
You may use one or a combination of the following when completing this exercise:
1. Online research
2. Real-life experiences
3. Interview or professional experts
4. Textbook materials
Write a 1-2 page paper that discusses trusts that qualify to be a shareholder of an S
Corporation and the considerations needed to achieve this situation. Be sure to include
what the qualifiers are to meet this and what types of things that each trust should consider
when considering this move to ensure compliance and avoid revocation. Students should
also explain the general filing process and considerations to be reviewed for S Corporations
tax returns and tax elections.
Students should include at least one reference in their paper submission, in addition to
their comments and thoughts on the required content.
Note:
Please expand your thoughts with lesson answers and use additional academic quality outside resources in addition to the assigned textbook and cite directly where the information comes from. That applies to each response for each question.
Please specify the writing requirements as the sample written assignment which I believe to
1)"go beyond the call of the question" and 2) use a wide variety of academic quality sources to support the answers given.
Please attempt to use more academic journals in your reference citations. Websites are great for additional information, but graduate level studies call for graduate level sources...such as peer reviewed journals.
Thank you!