#### § 1.1361-0 Table of contents.

This section lists captions contained in §§ 1.1361-1, 1.1361-2, 1.1361-3, 1.1361-4, 1.1361-5, and 1.1361-6.

## § 1.1361-1 S Corporation defined.

(a) In general.

(b) Small business corporation defined.

(1) In general.

(2) Estate in bankruptcy.

(3) Treatment of restricted stock.

(4) Treatment of deferred compensation plans.

(5) Treatment of straight debt.

(6) Effective date provisions.

(c) Domestic corporation.

(d) Ineligible corporation.

(1) General rule.

(2) Exceptions.

(e) Number of shareholders.

(1) General rule.

(2) Special rules relating to stock owned by husband and wife.

(3) Special rules relating to stock owned by members of a family.

(f) Shareholder must be an individual or estate.

(g) No nonresident alien shareholder.

(1) General rule.

(2) Special rule for dual residents.

(h) Special rules relating to trusts.

(1) General rule.

(2) Foreign trust.

(3) Determination of shareholders.

(i) [Reserved]

(j) Qualified subchapter S trust.

(1) Definition.

(2) Special rules.

(3) Separate and independent shares of a trust.

(4) Qualified terminable interest property trust.

(5) Ceasing to meet the QSST requirements.

(6) Qualified subchapter S trust election.

(7) Treatment as shareholder.

(8) Coordination with grantor trust rules.

(9) Successive income beneficiary.

(10) Affirmative refusal to consent.

(11) Revocation of QSST election.

(12) Converting a QSST to an ESBT.

(k)(1) Examples.

(2) Effective date.

(l) Classes of stock.

(1) General rule.

(2) Determination of whether stock confers identical rights to distribution and liquidation proceeds.

(3) Stock taken into account.

(4) Other instruments, obligations, or arrangements treated as a second class of stock.

(5) Straight debt safe harbor.

(6) Inadvertent terminations.

(7) Effective date

(m) Electing small business trust (ESBT).

(1) Definition.

(2) ESBT election.

(3) Effect of ESBT election.

(4) Potential current beneficiaries.

(5) ESBT terminations.

(6) Revocation of ESBT election.

(7) Converting an ESBT to a QSST.

(8) Examples.

(9) Effective date.

## § 1.1361-2 Definitions relating to S corporation subsidiaries.

(a) In general.

(b) Stock treated as held by S corporation.

(c) Straight debt safe harbor.

(d) Examples.

## § 1.1361-3 QSub election.

(a) Time and manner of making election.

(1) In general.

(2) Manner of making election.

(3) Time of making election.

(4) Effective date of election.

(5) Example.

(6) Extension of time for making a QSub election.

(b) Revocation of QSub election.

(1) Manner of revoking QSub election.

(2) Effective date of revocation.

(3) Revocation after termination.

(4) Revocation before QSub election effective.

## § 1.1361-4 Effect of QSub election.

(a) Separate existence ignored.

(1) In general.

(2) Liquidation of subsidiary.

(i) In general.

(ii) Examples

(iii) Adoption of plan of liquidation.

(iv) Example.

(v) Stock ownership requirements of section 332.

(3) Treatment of banks.

(i) In general.

(ii) Examples.

(iii)Effective date.

(4) Treatment of stock of QSub.

(5) Transitional relief.

(i) General rule.

(ii) Examples.

(b) Timing of the liquidation.

(1) In general.

(2) Application to elections in tiered situations.

(3) Acquisitions.

(i) In general.

(ii) Special rules for acquired S corporations.

(4) Coordination with section 338 election.

(c) Carryover of disallowed losses and deductions.

(d) Examples.

## § 1.1361-5 Termination of QSub election.

(a) In general.

(1) Effective date.

(2) Information to be provided upon termination of QSub election by failure to qualify as a QSub.

(3) QSub joins a consolidated group.

(4) Examples.

(b) Effect of termination of QSub election.

(1) Formation of new corporation.

(i) In general.

(ii) Termination for tiered QSubs.

(2) Carryover of disallowed losses and deductions.

(3) Examples.

(c) Election after QSub termination.

(1) In general.

(2) Exception.

(3) Examples.

## § 1.1361-6 Effective date.

[T.D. 8600, 60 FR 37581, July 21, 1995, as amended by T.D. 8869, 65 FR 3848, Jan. 25, 2000; T.D. 8994, 67 FR 34397, May 14, 2002; T.D. 9422, 73 FR 47527, Aug. 14, 2008]