Qsub - Shouldn't there be an 1120S

[BulldogTom]

I got a referral this week that has me scratching my head.   It is a former co-worker who called me.   Her new boss does not like the preparer of the tax return for the corporation and tasked my friend to find someone to take it on.   I tell her I will look at it but no guarantees.   She sends me over the 2017 tax returns, and one corp states that they are a QSub of the other corp.   But the other corp is not filing an 1120S, they are filing an 1120.

Correct me if I am wrong please.   Isn't a QSub election made so that an Scorp can own another corp?   What am I missing in this scenario?

Thanks

Tom
Modesto, CA

[BHoffman]

Not sure of your client’s details but I did find this article

https://www.thetaxadviser.com/issues/2010/jan/ccorporationsasscorporationsubsidiaries.html

[Richcpaman]

BT:

Generally, a S Corp can not own another S Corp.  A C-Corp can own 100% of an S-Corp.  And its earnings are passed through and taxed to the C-Corp.

Why one would want to do that, I do not know...

BHoffman's article addresses this issue.

Rich