TAX 655 Milestone One.docx - TAX 655 Milestone One TAX 655 Milestone One Michelle Sweeney CMA Southern New Hampshire University TAX 655 Federal Income

TAX 655 Milestone One.docx - TAX 655 Milestone One TAX 655...

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TAX 655 Milestone OneTAX 655 Milestone OneMichelle Sweeney, CMASouthern New Hampshire UniversityTAX 655 Federal Income Tax of CorpProfessor Maurice LaBrieFebruary 25, 2018
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TAX 655 Milestone OneI.MemorandumA.Based on the information provided from the client, Bob Jones, my recommendation is for the client to organize his car dealership as a C corporation. A C corporation is recognized as a separate tax paying entity. The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends (Forming a Corporation, n.d.). Since the C corporation is a separate legal entity from the client, should any legal be taken against the corporation, the client’s personal assets would be protected. Also, the by structuring the business as a C corporation, the client would not be liable for any debts the corporation may incur.B.When forming a business, the owner must determine whether to use the cash basis method or the accrual method of accounting. The cash basis is a method where
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