Ensure Your ESBT Elections

Private Letter Ruling 200819006, issued May 9, 2008, reminds planners to be careful when using electing small business trusts (ESBTs) to hold S corporation stock. The taxpayer in this case was fortunate. But unless practitioners pay close attention to whether trusts qualify for the ESBT election, their clients may not be so lucky. And, given that the consequence of failing to qualify as an ESBT is