A New Opportunity For Nonresident Aliens - Ownership In An S-Corp

Changes to U.S. tax law brought about by the 2017 Tax Cuts and Job Act1 ("T.C.J.A.") have affected many longstanding tax planning tools. One favorable change amends the rules regarding the persons who can own shares of an S-corporation. Historically, the S-corporation election was terminated if a foreign individual became an owner. Under the T.C.J.A., a foreign individual may now utilize an Electing Small Business Trust ("E.S.B.T.") to obtain an interest in an S-corporation.