Скачать или смотреть QSub: The Smartest Move You've Never Heard Of

In this episode of Concrete #s, George breaks down one of the most underused — yet incredibly powerful — strategies for growing construction companies: the Qualified Subchapter S Subsidiary, or QSub.

If you’re running your business as an S corporation and thinking about adding new divisions, rental operations, or development projects, this episode explains how QSubs can give you maximum liability protection without creating multiple tax returns or unnecessary complexity.

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Key Segments

1. The Problem — Growth Brings Risk

As your construction business expands, so does your exposure. Multiple job sites, divisions, and rental operations all carry unique risks. Setting up multiple LLCs or corporations can protect you — but it also creates administrative and tax headaches.

Enter the QSub: the balance between protection and simplicity.
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2. The Solution — What a QSub Actually Is

A QSub is a corporation owned 100% by your main S corporation.

• Legally: It’s its own entity — can own property, hire employees, open accounts, and even get sued separately.
• For taxes: The IRS treats it as part of the parent S corp.
One S corp return. One K-1 per shareholder. No extra filings.

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3. The Benefits — Why Construction Owners Love It
Risk Protection Without Complexity

• Separate liability between business lines or job sites.
• One division’s lawsuit or loss doesn’t touch the others.
Simplicity at Tax Time
• One Form 1120-S, one return.
• No messy consolidations or double accounting.
Flexibility for Growth
• Create QSubs for new job sites, equipment rentals, real estate projects, or different trades.
• Move assets between your S corp and QSubs tax-free — because they’re one entity in the IRS’s eyes.

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4. The Process — How to Set One Up

1. Your S corp owns 100% of another corporation.
2. File Form 8869 with the IRS to elect QSub status.
3. Once approved, that subsidiary is part of your parent company for taxes — but still its own legal entity for liability.

Simple setup, big payoff.
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5. Real-World Example

Example: Concrete Kings S Corp creates Concrete Kings Development Inc. as a QSub.
• The QSub manages land and development projects.
• The parent company keeps doing construction work.
If the development arm gets sued, the main business is protected — but everything still rolls into one tax return.
Legal separation, tax unity.

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6. When a QSub Makes Sense

Perfect for construction owners who are:

• Running multiple job sites or divisions.
• Getting into real estate development or equipment rentals.
• Holding assets (like trucks or heavy machinery) separately.
• Expanding geographically but want centralized control and taxes.
If you’re scaling fast, it’s time to have the QSub talk with your CPA.

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7. TL;DR Recap

• A QSub = 100%-owned subsidiary of an S corp.
• Separate legal entity, unified for taxes.
• One return, one K-1.
• Transfer assets tax-free between entities.
• Protect each division — without multiplying paperwork.

One parent. Many subs. One return. Maximum protection.

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Takeaway

QSubs let construction owners grow smart — not messy.
They offer legal separation and protection across multiple business lines, without adding new tax filings or complexity.
It’s the most underrated structure in the S corp playbook.

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