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Discussion Forum Index --> Advanced Tax Questions --> Subsidaries/Parent Company
Discussion Forum Index --> Tax Questions --> Subsidaries/Parent Company
Bean (talk|edits) said:
| 22 June 2008
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| I've got a new client who has 3 real estate companies all located in three different states (AR, NV, FL). This might get a bit complicated. Two are S-corp and one C-Corp all with separate Tax ID# (all filed 3 separate returns in the past.) They want to create ANOTHER company as a PARENT company and make all those existing companies subsidiaries. Possible? Procedure? Comments welcome and GREATLY appreciated. Thanks!
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Smktax (talk|edits) said:
| 22 June 2008
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| Form the new company, elect S corp status for the new company. Contribute the shares of the other entities into the new company and elect Qsub status for each. The combined transactions will be treated as Code § 368(a)(1)(D) reorganizations. See Treas. Reg. § 1.1361-4(a)(2)(ii). The C Corp may have Code § 1374 built-in gains and may also have E&P. You want to confirm that combining the C corp with S corps is for sure what you want to do.
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Bean (talk|edits) said:
| 23 June 2008
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| Smktax: Thanks so much for your input. You have a point - re the C corp making sure that is the step to take. For those three to be subsidiary companies, after Qsub status elected, that would be the final tax filing for them...Then in future, will just be one corporate tax return to file, correct?
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Smktax (talk|edits) said:
| 24 June 2008
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| Yes. The Qsubs will be disregarded under the S corp and one S corp tax return will be filed.
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