Common use of Converting a QSST to an ESBT Clause in Contracts

Converting a QSST to an ESBT. For a trust that seeks to convert from a QSST to an ESBT, the consent of the Commissioner is hereby granted to re- voke the QSST election as of the effec- tive date of the ESBT election, if all the following requirements are met: (i) The trust meets all of the require- ments to be an ESBT under paragraph (m) (1) of this section except for the re- quirement under paragraph (m)(1)(iv)(A) of this section that the trust not have a QSST election in ef- fect. (ii) The trustee and the current in- come beneficiary of the trust sign the ESBT election. The ESBT election must be filed with the service center where the S corporation files its in- come tax return. This ESBT election must state at the top of the document ‘‘ATTENTION ENTITY CONTROL— CONVERSION OF A QSST TO AN ESBT PURSUANT TO SECTION 1.1361– 1(j)’’ and include all information other- wise required for an ESBT election under paragraph (m)(2) of this section. A separate election must be made with respect to the stock of each S corpora- tion held by the trust. (iii) The trust has not converted from an ESBT to a QSST within the 36- month period preceding the effective date of the new ESBT election. (iv) The date on which the ESBT election is to be effective cannot be more than 15 days and two months prior to the date on which the election is filed and cannot be more than 12 months after the date on which the election is filed. If an election specifies an effective date more than 15 days and two months prior to the date on which the election is filed, it will be effective on the day that is 15 days and two months prior to the date on which it is filed. If an election specifies an effec- tive date more than 12 months after the date on which the election is filed, it will be effective on the day that is 12 months after the date it is filed.