Paper topic Choice of Entity--C-Corps vs. S-Corps. Discuss advantages/disadvantages. When does one make more sense than another?
I can remember being in the infancy of my career in public accounting and as a staff accountant in a regional accounting firm you just prepare and try to follow the same that was done last year at the firm I worked at it was labeled “SALY” (same as last year).
The purpose of my paper is to demystify and shed some light on the controversial topic of the S over the C because of double taxation at the corporate level and upon distribution of profits by form of dividends at the shareholder level. I will use examples in which one makes sense over the other as seen in practice and theory
Corporations by default are a creature of state statute and are a separate entity from its shareholders offering limited liability to what is invested in the corporation be that an S or Corporation. After maturing professionally and this day today I see federal state and local tax compliance things in a different light than just incorporating and putting numbers on a form. The corporate structure is very common, and I used to think the S Corporation was the best option in most cases, however I think there are many instances in which the dreaded C corporation and its double taxation shines as a planning tool amongst other advantages to the Subchapter S corporation and its pass-through characteristics. I think what most people don’t understand is the constraints that an S corporation possesses especially when you have more than one owner and or a diversified capital structure and multiple investors and or owners. In this paper I will discuss the advantages and disadvantages of the C corporation and S Corporation with some real-life examples I have encountered as a tax professional over the decades. There are some instances in which I think one makes sense over the other undoubtedly, and it really comes down to the type of business the shareholder or shareholders envision not only the nature of the business but the long-term goals for the corporation, I think this is the key to planning, and or consulting in a professional context. What are your long-term goals for the business and how do you plan to fund operation? what business purpose it will engage in and really the hardest question is where you see the business in the long haul. I will go over some examples in where one would make sense over the other because I am not against either I think both have their advantages and disadvantages depending on the business circumstance. The purpose of my paper is to demystify and shed some light on the controversial topic of the S over the C because of double taxation at the corporate level and upon distribution of profits by form of dividends at the shareholder level. I will use examples in which one makes sense over the other as seen in practice and theory.
These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.The purpose of this paper is to demystify and shed some light on a potentially controversial topic – which type of corporation is more advantageous, an S Corporation or the traditional C Corporation? Double taxation of income at both the corporate and shareholder levels (upon distribution of profits as dividends) is the major selling point of the S form. However, there will be discussions on the advantages of the C type in certain situations. Illustrations will be supplied to provide more meaningful comparison between them, linking the theory with practical examples.
With professional maturity at this point, I now see in a different light compliance with federal state and local tax laws. There’s so much more to merely preparing articles of incorporation and putting numbers on a form. The C corporate structure is very common, and I used to think that the S structure was the better option, in most cases. However, I realized that there are instances when the criticized C Corporation, despite its double taxation nature, possesses worthwhile advantages against the S corporation and its pass-through characteristics....
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