Sole Proprietorship to LLC or C corporation
Not what you're looking for?
1. Your client has operated a sole proprietorship for several years and is now interested in reaising capital for expansion. He is considering forming either a C corporatoin or an LLC.
a. Describe the treatment of an LLC and discuss any advantages the LLC offers over eht C corporation.
b. Assume instead the clinet has previously operated the business as a C corporatino. Describe the tax consequences of converting it to an LLC.
2. What is the significance of "hot assets" in the sale or exchange of a partnership interest?
Purchase this Solution
Solution Summary
Sole proprietorship to LLC or C corporation is examined. THe significance of a "hot asset" is discussed in the sale or exchange of a partnership interest.
Solution Preview
Question 1a
Under an LLC, the owner can elect for a corporate tax treatment or a pass-through entity which means that the taxes will be paid by the LLC owners. Moreover, income of the LLC is not considered as earned income of the owners and hence, not subject to self-employment ...
Purchase this Solution
Free BrainMass Quizzes
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.