In a recent case, Taproot Administrative Services, Inc. v. Comm’r., 109 A.F.T.R.2d 2012-1446 (9th Cir. 2012), the Ninth Circuit Court of Appeals affirmed the Tax Court’s decision that a Roth IRA is not an eligible shareholder of an S corporation. Under IRC § 1361, generally individuals, estates, certain exempt organizations and certain trusts (QSSTs and ESBTs) are eligible S corporation shareholders. The Taproot case was decided before Treas. Reg. §1.1361-1(h)(1)(vii) was promulgated. Treas. Reg. §1.1361-1(h)(1)(vii) now provides that individual retirement accounts (including Roth IRAs) are not eligible S corporation shareholders subject to certain exceptions.
Register Now As you are not an existing subscriber please register for your free daily legal newsfeed service.Register
If you have any questions about the service please contact email@example.com or call Lexology Customer Services on +44 20 7234 0606.
S corporations: eligible shareholder
- Baldwin Haspel Burke & Mayer
- May 1 2012
If you are interested in submitting an article to Lexology, please contact Andrew Teague at firstname.lastname@example.org.
Director, Legal Services
Cisco Systems, Inc