A naturalized citizen inherited shares of a family's S corporation upon death of her husband (a US citizen). She passed subsequently away in 2011 and left her shares to her daughter, a Japanese national. Does this jeopardize the S Corporation status?
1 Answer from Attorneys
Yes. The non-resident aliens may not own shares in an S-Corporation and it will lose its S-Chapter election. The daughter should establish an LLC or Trust with its own Federal Tax ID that can serve as the Shareholder. Aloha, Jon A. Zahaby, Esq.
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