What business entities are available for a new business? Wha
Not what you're looking for?
What business entities are available for a new business? What are the tax and nontax advantages of each form? Select two business types and provide an example of when that selection is most appropriate from a tax perspective and from a nontax perspective.
Once a business has elected its tax status using check-the-box regulations, what options are available if it needs to change its tax status? What should a business consider before electing to change its tax status?
Purchase this Solution
Solution Summary
What business entities are available for a new business? What are the tax and nontax advantages of each form? Select two business types and provide an example of when that selection is most appropriate from a tax perspective and from a nontax perspective.
Once a business has elected its tax status using check-the-box regulations, what options are available if it needs to change its tax status? What should a business consider before electing to change its tax status?
Solution Preview
What business entities are available for a new business? What are the tax and nontax advantages of each form? Select two business types and provide an example of when that selection is most appropriate from a tax perspective and from a nontax perspective.
The most common forms of business entities are a sole proprietor, a corporation, a partnership, or an LLC.
Sole proprietor:
advantages - the owner retains full control over the business and the business operations. The owner and the business are inseparable. The income and expenses from the business is reported on the owner's 1040. There are no high accounting fees (typically), and the owner saves money on accounting work. The greatest advantage here, tax and non-tax, is that the owner or owners have full control, and can basically run the company as they want to, without having to answer to anyone, including a board of directors.
disadvantages - when the owner dies, so does the business. It does not exist without the owner. The owner, as a sole proprietor, can never go on payroll, and have W-2 income. All checks written to the owner are considered to be draw (cash). All ...
Purchase this Solution
Free BrainMass Quizzes
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)