My name is Henry Chambers and I'm going to talk to you about the tax cut and jobs of 2017. The changes made to elect a small business truck trusts that happen beginning in 2018. So, a little background on the pre-2018 law: An electing small business trust could be a shareholder of an S corporation, provided that none of the beneficiaries of the trust or non-resident related individuals. In other words, the S corporation would normally have shareholders that are individuals. What if somebody died? It could be an estate. In certain cases, a trust could have beneficiaries that had the same characteristics of the S corporation rules as its beneficiary. So, that's the way it has been for 30-some years. The charitable contribution rules applicable to the trust apply. So, if an S corporation made a charitable contribution, it would flow through those attributes with flow through to the trust on the K1. The trust would then look at the contributions at its entity level of taxation. And those rules were fairly strict because trust can only deduct charitable contributions up to the amount of gross income they have. If a large charitable contribution were made by the S corporation, for example, and promulgated through to the trust, if the trust did not have enough gross income to cover it, any excess charitable contribution loss would have no carryover. Now, those rules are different. Then, if instead of being viewed at the trust level, those charitable contributions were seen as passing through to the individual beneficiaries. Because an individual can deduct up to a percent of gross income. Sometimes that's 50 percent, for example, with a five-year carryover carry forward of any excess contributions. So, the amount of charitable contribution could potentially be higher. But any excess contributions benefit by being...
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Sample esbt election Form: What You Should Know
Electing a Small Business Trust (ESB) to be an Eligible Trust. Form 2654 (Amended Tax Guide) — IRS Sep 21, 2024 — This information returns form provides information return information for electing as an S corporation. See Regulations section 1.1362-2 for information return instructions. Form 2658 (Amended Tax Guide) — IRS Sep 8, 2024 — This information returns form provides information return information for electing as an ESB. The form specifies the annual cost of electing each status. See Regulations section 1.1362-2 for information return instructions. Form 2668 (Amended Tax Guide) — IRS Jun 4, 2024 — This information returns form provides information return information for electing as a trustee of an S corporation. See Regulations section 1.1362-2 for information return Instructions on Establishing an ESB. Mar 24, 2024 — This form is used to establish an ESB that is eligible to make tax-free distributions on behalf of the participating small employer from the ESB trust funds. Form 2553 (Rev. December 2020) IRS Regulations IRS Form 2664 — The Internal Revenue Service (IRS) form specifies if the S corporation was not formed for business, the qualifying period in Tax Topic 609, and other facts that indicate whether the S corporation is a foreign corporation. Regulations IRS 2664 (Rev. Date) — Revenue Ruling 2008-29, Rev. 2, Internal Revenue Service. Provides information and instructions on how to make an election to be an ESB. Regulation 2664-3 — Special Rules for Certain Qualified Small Business Trusts and Qualified End-Participant Trusts. Providing that qualified small business and S corporation taxpayers are treated similarly for purposes of the application of the rules described in 2664 or (Rev. 1, 2010) and a Rev. 2008-29, Rev. 2, Internal Revenue Service (IRS) Internal Revenue Service (IRS) Revenue Ruling 2011-36, Notice 2010-11, Tax Reform (Amendment) Act of 2010. Provides that a qualified small business (USB) under the Income Tax Act (Section 605) may elect to pay distributions to its shareholders in a qualified end-participant trust (GET).
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