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Can an S Corporation
own stock in another Corporation?
An S
corporation may own stock in another corporation without loss of S
corporation status. The other corporation will be a C corporation
because it has a corporate shareholder. If the S corporation owns all
of the sock of another corporation, the S corporation may elect to
treat
the subsidiary as a qualified subchapter S subsidiary *QSub) in which
case the QSub is deemed to have liquidated into its parent and becomes
a
disregarded entity.
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