Client wants to incorporate. Lawyer wants an S-Corp saying there are advantages when client sells his stock in company, in whole or in part. The only S sale I've done was an asset sale and not a stock sale, so I don't understand the difference in selling stock in an S vs a C. Client has about $26000/year in family medical insurance paid by company, so I thought he'd save on Medicare and income taxes as a C (personal rate is 28-33%, CT 5%). Educate me, please.
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See page SB2-9
in the tax book for an explanation of gain deferral or gain exclusion.
Probably what the attorney is talking about. -
Double Taxation upon Sale
Lawyer doesn't want a C. He said client can avoid double taxation upon sale of stock (in a few years) by being an S. But, you did get me reading the SB on CD. Had been reading TTB, but only the Deluxe so more coverage on CD. Trying to follow the flow of a sale of stock in a C vs in an S but currently preparing the sale of a partnership interest, so my mind is blending all into one huge mess. When I run the world, I'll make more similarities and fewer differences in how things are taxed!Comment
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I apologise
You did say S Corporation.
There is no double taxtion on a stock sale C or S.
Most sales of small businesses are asset sales so the C Corp would be a disadvantage in that respect.Last edited by veritas; 02-05-2008, 11:57 PM.Comment
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