A critical factor in the choice of entity decision is whether the profits are reinvested in the business or currently made available to the partners or shareholders. This course considers the comparative tax consequences of the entity choice decision depending on whether profits are being accumulated or paid to the owners.
Learning Objectives
- Explain the potential for double taxation for a C corporation
- Analyze and compare the tax consequences of tax-deductible payments to owners of partnerships and corporations, with and without the S corporation election
- Identify and analyze tax planning ideas to avoid double taxation
- Determine the importance of the differences in tax results when assets are transferred to the owners of partnerships and corporations, with and without the S election
- Identify situations where the accumulated earnings or personal holding company tax could be applied
- Compare the current tax costs if most profits are accumulated by a partnership, corporation not making the S election or a corporation making the S election
Major Topics
- Basics of the taxation of partnerships, S corporations, corporations not making the S election.
- Tax consequences of tax-deductible payments to owners of partnerships and corporations
- Tax consequences of making distributions to the owners of partnerships and corporations
- The accumulated earnings tax
- Entity choice comparison of current tax costs if most profits are accumulated
