Your client has operated a sole proprietorship for several years, and is now interested in raising capital for expansion. He

Your client has operated a sole proprietorship for several years, and is now interested in raising capital for expansion. He

Question:

Your client has operated a sole proprietorship for several years, and is now interested in raising capital for expansion. He is considering forming either a C corporation or an S Corporation.
 

a. Describe the treatment of an S Corporation and discuss any advantages offered over the C corporation.

b. Assume instead the client has previously operated as a C corporation. Describe the tax consequences of converting to an S Corporation.

Expert Answer:

Answer rating: 100% (QA)

a An S Corporation also known as an S Corp offers several advantages over a C Corporation especially for small businesses 1 Pass Through Taxation One
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