USA Can an LLC own an S corp.?

[Hung Lam]

Hi, I have a question regarding tax issue. Can an LLC own an S corp.?

 

[smallbushelp]

To qualify for S corporation status, the corporation must meet the following requirements:

• Be a domestic corporation
• Have only allowable shareholders
  • May be individuals, certain trusts, and estates and
  • May not be partnerships, corporations or non-resident alien shareholders
• Have no more than 100 shareholders
• Have only one class of stock
• Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations)

Generally then, no, an LLC cannot own an S Corp. Is the LLC a single member LLC?

 

[bradgilliatt]

An llc has nothing to do with a tax election, it is a legal structure set up within state laws that provides seperation of personal and business assets. With that said, an llc can with ease file an election with the irs to be taxed as a subchaper s corporation (s-corporation). I say this because i would do that frequently with clients while i was in public accounting due to certain coats savings that come with the election

 

[Pat A.]

Hung Lam, so far no one has actually "answered" your question so I will take care of that. The answer is NO. An LLC cannot own an S-Corp. However an S-Corp can actually own an LLC. The reason is complicated to explain, but this is the way it is.

 

[bradgilliatt]

Hung Lam, so far no one has actually "answered" your question so I will take care of that. The answer is NO. An LLC cannot own an S-Corp. However an S-Corp can actually own an LLC. The reason is complicated to explain, but this is the way it is.

Wrong. Look up letter ruling 200107025. You answered his question but with an incorrect answer.

 

[Pat A.]

I don't even need to look up the ruling. The LLC's individual owners actually can own an s-corp by way of their LLC but the LLC will not be the individual owner of the s-corp.

 

[bradgilliatt]

I don't even need to look up the ruling. The LLC's individual owners actually can own an s-corp by way of their LLC but the LLC will not be the individual owner of the s-corp.

Most comments ive seen on here have been incorrect and appear to be posted by people with very limited knowledge/low level professional experience...you are obviously not one of those people. You are actually spot on and ur knowledge on this topic likely far exceeds mine....i stand corrected, and as such will edit my prior comment where i erroneously stated you gave an incorrect answer. I offer a very humble apology.