The current taxation of business operations is a visible recurring focus of tax planning. The choice to use a particular legal entity is a significant factor in this planning process. This course considers the comparative federal tax consequences of operating the business as a partnership entity or a corporation with or without an S corporation election.
Learning Objectives
- Identify and evaluate differences in tax rates applicable to corporations and individuals
- Analyze the significance of differences between the corporate and individual treatment of capital gains and losses
- Understand the importance of the self-employment tax and FICA/ Medicare taxes
- Consideration of the importance of the individual alternative minimum tax
- Identify and analyze tax planning opportunities using differences in tax rates
Major Topics
- Basics of the taxation of partnerships, S corporations, corporations not making the S election
- Tax rates applicable to taxable income reported by a corporation not making the S corporation election
- Tax rates applicable to ordinary taxable income of partnerships and S corporations which is allocated to individual taxpayers
- Tax rates applicable to long term capital gain allocated to individual partners or shareholders of S corporations
- Comparison of corporate and individual tax rates
- Tax planning opportunities using differences in tax rates
- Comparison of tax savings for losses based on the choice of entity
- The self-employment tax and FICA/ Medicare taxes
- The individual alternative minimum tax
