Liquidating qsss qsub dating multiple partners

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Any corporation formed as a result of the merger of a corporate trust into its QSUB that is classified as a federal S corporation also will be classified as a Massachusetts S corporation as long as it otherwise satisfies the requirements set forth in the definition of "Massachusetts S corporation" under 830 CMR 62.17A.1(2). Moreover, the corporate trust's assets and liabilities, while it still existed for Massachusetts tax purposes, are to be included in determining the S corporation's corporate excise attributable to the non-income measure, assuming such items were acquired by the S corporation as a result of the reorganization and continue to be held by it on the last day of its taxable year. In determining whether and at what rate the Massachusetts S corporation and QSUB are subject to taxation under G. Accordingly, the S corporation's "total receipts," as defined in G. The aggregated total receipts of all such entities must include income taxable at the entity level under G. If the taxable year in which the reorganization takes place includes March 5, 2003, the QSUB must include in its calculation all of its receipts for such taxable year, without regard to the March 5, 2003 date. In determining the non-income measure of the excise for a short taxable year, it may be prorated by multiplying the excise by the number of calendar months (including partial months) in the taxable year and dividing the resulting amount by twelve. For purposes of determining a non-resident shareholder's distributive share of income, loss, deduction, and credit taxable in Massachusetts under G. Issue 4: Unwinding of LR 99-17 Reorganizations - Upstream Merger of QSUB into its Corporate Trust Parent Will the unwinding of a LR 99-17 type reorganization by merging a QSUB into its corporate trust parent trigger the recognition of any taxable gain or loss to either entity? The unwinding of a LR 99-17 type reorganization by merging a QSUB into its corporate trust parent will not trigger the recognition of any taxable gain or loss to either entity. However, the deemed liquidation of the QSUB did not affect its taxation under the non-income measure of the corporate excise. Furthermore, there is no prior authority in Massachusetts for the proposition that a partnership will be treated as a corporation for purposes of the Commonwealth's recognition of a federal "F" reorganization. Nonetheless, for purposes of this Directive, no taxable income will be recognized by the partners/shareholders for Massachusetts income tax purposes upon the merger of a partnership parent into its QSUB. The partnership is not required to file a final return in the taxable year in which the reorganization takes place. 63, § 32D, non-income measures of the corporate excise, Schedule SK-1s, and apportionment factors, as appropriate, are to be computed for the taxable year in which the reorganization takes place as specified in Directive 3 above. Rather, its items of income, loss, deduction, and credit, together with those of its QSUB, attributable to the period before they cease to exist for Massachusetts tax purposes are to be included on the Schedule SK-1 prepared by the Massachusetts S corporation. 63, § 32D(a)(ii) for the taxable year in which the reorganization takes place, their aggregated total receipts for such year are to be computed as stated in section II of TIR 03-20. 63, § 32D(b)(2)(a) and 830 CMR 62.17A.1(2), from the date of the conversion to the end of its taxable year are to be combined with those of the corporate trust (which would include the receipts of the QSUB) from the first day of its taxable year until the date of conversion. In computing the QSUB's total receipts, the annualization rule at 830 CMR 62.17A.1(11)(c) will apply, assuming the QUBS's taxable year is less then twelve months, which depends upon when the reorganization takes place. In completing its final Form 355S, the QSUB must compute any non-income measure of the corporate excise it may owe based entirely on its own assets and liabilities. The QSUB must determine its apportionment factors for purposes of its final Form 355S as specified in section V. For purposes of determining its non-income measure, the S corporation must determine its apportionment factors based not only on its own property, payroll, and sales but on those of the QSUB and corporate trust prior to reorganization, assuming that such items were acquired by the S corporation as a result of the reorganization and continue to be held by it on the last day of its taxable year. 62, § 17A and 830 CMR 62.17A.1(6) in the year of the reorganization for purposes of Schedule SK-1, the S corporation must determine its apportionment factors by including the property, payroll, and sales of the QSUB and corporate trust before they ceased to exist for Massachusetts tax purposes. Directive 4: The answer to the first question is no. Discussion: Although the non-recognition of gain or loss and basis rules set forth in this Directive are identical to those that would have applied had the federal provisions under I. The tax-free nature of the unwinding of the QSUB into the corporate trust arises because there is now no liquidation to be taxed. At the same time, for Massachusetts income tax purposes, the QSUB was deemed liquidated into the corporate trust. Directive 5, which discusses what returns to file and how to report income and other tax attributes as a result of a merger of a QSUB into its corporate trust parent, also will apply to the unwinding of a LR 01-9 type reorganization, as the surviving corporate trust will be taxed under G. For Massachusetts income tax purposes, the parent entity is not treated as a corporation as it is for federal income tax purposes. 63, § 32D, if (1) it has income that would have been taxed to it for federal income tax purposes had it been treated federally as a separate S corporation or (2) it has total receipts for the taxable year, computed under the rules for combining and aggregating total receipts at 830 CMR 62.17A.1(11)(e) and (f), of million or more. Additionally, as stated in TIR 03-20, which explains St. 4, § 18, any QSUB that is not subject to the financial institution excise under G. Additionally, is a final return required to be filed by the QSUB? In the event the QSUB used its partnership parent's taxpayer identification number in filing its Form 355S, a second note should be added to the QSUB's final Form 355S stating that "the taxpayer identification number appearing on this return will continue to be used by the surviving partnership when filing its required Form 3." Discussion: A. The surviving partnership must include in its Form 3 and Schedule 3K-1 for the taxable year in which the reorganization takes place all income that it earns on its own account for the taxable year, plus all income earned by the QSUB before it ceased to exist for Massachusetts tax purposes. In determining whether and at what rate the QSUB is subject to taxation under G. Also, for purposes of its final Form 355S, the QSUB must compute any net income subject to tax under G. Issue 11: Misapplied Estimated Tax Payments Will the Department allow estimated tax payments made prior to a merger discussed above by an entity that is subsequently liquidated in the merger to be applied to the account of the surviving entity or to its shareholders? The Department will allow estimated tax payments made prior to a merger discussed above by an entity that is subsequently liquidated in the merger to be applied to the account of the surviving entity or to its shareholders. Additionally, are final returns required to be filed by the corporate trust and QSUB? In addition, the Massachusetts S corporation must file a Schedule Assuming that the IRS allows the S corporation formed as the result of the "F" reorganization described in Directive 1 above to retain the previously existing S corporation's taxpayer identification number when reporting its income to the federal government, it also may use such number (i.e., the previously existing corporate trust's taxpayer identification number) when filing its Form 355S with the Commonwealth. Discussion: Federally, a QSUB is deemed liquidated upon the making of a valid QSUB election. How should the surviving partnership file a return and report income, gross receipts, property, payroll, sales and other relevant tax attributes for the taxable year in which the reorganization takes place? The surviving partnership must file Form 3, to report its income for the taxable year in which the reorganization takes place. "Final return" should be clearly noted on the return. 63, § 32D(a)(ii) for the taxable year in which the reorganization takes place, its total receipts are to be computed as specified in subsection B of the Discussion section in Directive 5 above. 63, § 32D (a)(i) and (ii) of the corporate excise it may owe, any non-income measure of the corporate excise it may owe, and its apportionment factors as specified in subsection B. Computing QSUB's Net Income Subject to Tax Under G. Alternatively, an actual accounting of the QSUB's net income for the period may be made. 63, § 32D (a)(i) and (ii) of the corporate excise in the year of the reorganization based solely on its own items of income, loss, deduction, and credit. Directive 5 to report its income for the taxable year in which the reorganization takes place. "Final return" should be clearly noted on the return. 63, § 32D(a)(ii) for the taxable year in which the reorganization takes place, its total receipts are to be computed as specified in section II of TIR 03-20. In computing the aggregated total receipts, each entity must first compute its total receipts separately for the taxable year in which the reorganization takes place. This was the case for the corporate trust in LR 01-9. 63, § 32(b) or § 39(b); or to the entity level tax under G. For Massachusetts income tax purposes, the only factual difference between LR 99-17 and the three rulings at issue is that in LR 99-17 the parent is a corporate trust, whereas, in the other three rulings the parent is a partnership.

To the extent that the Department's past public written statements have stated otherwise, this Directive reaffirms the rule that the corporate non-recognition provisions of the Code that apply to corporate trusts are limited to those set forth in §§ 351-368. Thus, it must file Form 63FI, not Form 355S, as stated in Directive 3. In computing its net income subject to tax under § 2 for the taxable year in which the reorganization takes place, the financial institution should do so based solely on its own items of income, loss, deduction, and credit. The QSUB must compute its net income subject to tax under G. Accordingly, assuming that the reorganization takes place in a taxable year that includes March 5, 2003, the QSUB must compute its net income based solely on its own items of income, loss, deduction, and credit for the period beginning March 1 or 5, 2003, and ending on the date it ceases to exist for Massachusetts tax purposes. c.62, § 8(a), are generally taxable as resident natural persons under § 8, regardless of their treatment for federal tax purposes. How should the surviving corporate trust file a return and report income, gross receipts, property, payroll, sales and other relevant tax attributes for the taxable year in which the reorganization takes place? Rather, it will be subject to tax as a financial institution under G. subsections G and H of the Discussion section in Directive 3. 63, § 32D (a)(i) and (ii) of the corporate excise for purposes of its final Form 355S as specified in section III of TIR 03-20. Issue 5: Filing Issues as Result of Upstream Merger in Directive 4 Directive 4 involves the unwinding of a LR 99-17 reorganization by merging a QSUB into its corporate trust parent. In completing its Schedule SK-1 and in determining its apportionment factors for purposes of Form 63FI and Schedule SK-1, the financial institution should proceed exactly as the S corporation is directed to proceed in Directive 3, in completing its Schedule SK-1 and in determining its apportionment factors for purposes of Form 355S and Schedule SK-1. This Directive discusses the income tax ramifications of various reorganizational options. Issue 2: Restoring the Pre-LR 99-17 Structure and Tax Treatment as Result of Downstream Merger The purpose of merging the corporate trust into its QSUB generally would be to re-establish the Massachusetts organizational structure and tax treatment that typically applied to taxpayers before LR 99-17. Additionally, a QSUB's income also continues to be taxed to its parent, if its parent is a non-S corporation parent such as a Massachusetts corporate trust or financial institution, or to its partners if it is a partnership. Before the issuance of that ruling, most of these clients operated simply as stand-alone Massachusetts S corporations. Accordingly, merging a Massachusetts corporate trust parent into its QSUB will not trigger the recognition of any taxable income to either entity or to the shareholders of the corporate trust as long as the merger qualifies as a tax-free "F" reorganization for federal income tax purposes.

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