You may know that organizing your business as an S corporation can be a smart move.
But did you know that your S corporation can also own a subsidiary corporation known as a QSub?
Why would you want to set up a QSub? Because it gives you extra legal protection, yet avoids any tax increases and allows you to file a single S corporation tax return.
To find out more, I urge you to check out my new article titled Tax Tips: Should Your S Corporation Have an S Corporation Subsidiary?
Three ways our fact-filled article can help you:
- We’ll explain how the QSub gives you extra legal protection. It’s a simple fact: A corporation that provides products or services should not be the same one that owns the business assets. Which means you need at least two corporations. The bottom line? The S corporation, combined with its QSub, helps protect your assets. Get the whole story when you read the full article.
- We’ll tell you how to make the QSub election. Any domestic S corporation can create a QSub by forming (or acquiring) a 100% parent subsidiary corporation and filing IRS Form 8869, Qualified Subchapter S Subsidiary Election. Don’t worry. It’s easier than it sounds. Get the facts when you read the full article.
- We’ll explain why you have to treat a QSub as a separate entity. If you don’t, your QSub can be disregarded for state liability purposes. Comply with all corporate formalities and you’ll be in good shape. We’ll tell you more when you read the full article.