Form 2553 is used by qualifying small business corporations and limited liability companies to make the election prescribed by Sec. 1362. A corporation or other entity eligible to be treated as a corporation files this form to make an election under section 1362 (a) to be an S corporation.

The good news is that Section 1361 carves out two specific trust structures designed for exactly this situation: the Qualified Subchapter S Trust (QSST) and the Electing Small Business Trust (ESBT).

CP288 tells you we accepted your election or treatment as a Qualified Subchapter S Trust (QSST).

In United States federal income tax law, a qualified Subchapter S trust is one of several types of trusts that may retain ownership as the shareholder of an S corporation. The beneficiary of such a trust makes a QSST election for each S corporation in which the trust holds stock.

A QSST is a trust whose terms require that: if the trust does terminate during the current income beneficiary’s lifetime, all the assets of the trust must be distributed to that beneficiary. [17]

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It is eligible to hold stock in an S corporation, and, under the S corporation rules, it is treated as a Subpart E trust (Sec. 1361 (d); Regs. Sec. 1.1361-1 (j)). The QSST may be useful for estate planning purposes. It may also be useful for holding S stock for the benefit of a minor or incompetent. Net investment income tax of a QSST.

Two of these are an electing small business trust, or ESBT, and a qualified Subchapter S trust, or QSST.

It is eligible to hold stock in an S corporation, and, under the S corporation rules, it is treated as a Subpart E trust (Sec. 1361 (d); Regs. Sec. 1.1361-1 (j)). The QSST may be useful for estate planning purposes. It may also be useful for holding S stock for the benefit of a minor or incompetent. Net investment income tax of a QSST.