A Qualified Subchapter S Trust (QSST) is a specific type of trust that allows individuals to hold shares in a Subchapter S corporation while complying with the requirements set by the Internal Revenue Service (IRS). CP288 tells you we accepted your election or treatment as a Qualified Subchapter S Trust (QSST). QSSTs are different than other other S corporation trusts in that the beneficiary is usually someone other than the grantor of their estate. Grantors/shareholders can use the QSST to make a gift of all or part of S corporation stock and retain voting power while the beneficiary receives the income. In United States federal income tax law, a qualified Subchapter S trust is one of several types of trusts that may retain ownership as the shareholder of an S corporation. The beneficiary of such a trust makes a QSST election for each S corporation in which the trust holds stock. A Qualified Subchapter S Trust (QSST) is a trust specifically designed to hold S corporation stock without disqualifying the company’s pass-through tax status. S corporations can only have certain types of shareholders, and an ordinary trust is not one of them. Net investment income tax of a QSST. Individuals, estates, and certain trusts are subject to a net investment income tax, which is an additional tax of 3.8%. In the absence of an anointed successor, the remaining shareholders of the corporation, perhaps including members of the decedent’s family, may determine that their best option is to sell. Qualified Subchapter S Trusts (QSSTs) enable closely held S corporations to maintain their tax status while allowing trust ownership. They require a single income beneficiary who is a U.S. citizen or resident, with all income distributed annually. A Qualified Subchapter S Trust (QSST) election clause allows a trust to be treated as a permissible shareholder of S corporation stock by making a specific election with the IRS. Business succession planning and estate planning are often linked together, particularly in the case of closely held family businesses.