Prudent business owners who own multiple businesses generally form a separate corporation for each separate business in order to isolate the liabilities of one business from the other. If you currently own a Subchapter S Corporation (“S Corporation”) and are thinking about starting another business as a “division” of your S Corporation, then the Qualified Subchapter S Subsidiary (“QSSS”) may be a useful vehicle to establish a parent-subsidiary structure through filling IRS Form 8869. Each QSSS is treated as a separate legal entity, maintaining its state law liability protection.
For federal income tax purposes, however, each QSSS is not treated as a separate entity such that its income and expenses roll-up into, and are reported as part of, the parent’s S Corporation tax return. Additional Advantages which QSSS may provide are significant tax benefits. In the instance where some entities in the parent-subsidiary structure generate taxable income while other entities generate taxable losses, the QSSS may allow the income and loses to offset one another.
To understand how an S corporation election can save you money, speak to a one of our attorneys by calling 800-743-9900 or visit our website today!
Assistance
Submit details below
Message sent successfully!
Please make sure the Full Name, Phone, Email and Topic are filled.
There was an error sending the message. Please try again.