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KC427
Level 1

Do I need to disclose the 100 % stock ownership (C-corp) by my revocable family trust? OR Do I choose I just use individual?

 
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TomYoung
Level 13

Do I need to disclose the 100 % stock ownership (C-corp) by my revocable family trust? OR Do I choose I just use individual?

The ownership "by my revocable family trust" is irrelevant.   The IRS considers a revocable family trust as a "disregarded entity" so for the IRS's purposes "you" own the stock.

If you buy stock in a publicly traded entity - Procter & Gamble, say - you don't disclose that purchase or ownership in your personal income tax return until you sell the stock and that generally applies in this situation, too.  Of course the C-Corp is obligated to file its own income tax return and any dividends paid by the C-Corp to you or salary paid to you does get included in your own income tax return.

The larger issue 100% ownership does affect is reportable transaction you might enter into with the C-Corp.  Since these sort of transactions would clearly not be "arms length" transaction with an independent 3rd party there certainly can be important tax effects, like limitations on recognizing losses, "basis" issues for purposes of calculating depreciation, and so forth.  I'd suggest you get some local competent help, (e.g., a CPA), involved in these sort of transactions.

Tom Young

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TomYoung
Level 13

Do I need to disclose the 100 % stock ownership (C-corp) by my revocable family trust? OR Do I choose I just use individual?

The ownership "by my revocable family trust" is irrelevant.   The IRS considers a revocable family trust as a "disregarded entity" so for the IRS's purposes "you" own the stock.

If you buy stock in a publicly traded entity - Procter & Gamble, say - you don't disclose that purchase or ownership in your personal income tax return until you sell the stock and that generally applies in this situation, too.  Of course the C-Corp is obligated to file its own income tax return and any dividends paid by the C-Corp to you or salary paid to you does get included in your own income tax return.

The larger issue 100% ownership does affect is reportable transaction you might enter into with the C-Corp.  Since these sort of transactions would clearly not be "arms length" transaction with an independent 3rd party there certainly can be important tax effects, like limitations on recognizing losses, "basis" issues for purposes of calculating depreciation, and so forth.  I'd suggest you get some local competent help, (e.g., a CPA), involved in these sort of transactions.

Tom Young

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