Solution%20to%20Assignment%20Problem%20Ch15%28I%29

Solution%20to%20Assignment%20Problem%20Ch15%28I%29 - estate...

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Solution to Assignment Problem Fifteen - 1 The welding business should be incorporated for several reasons. These can be briefly described as follows: 1. The business is taxable and, since Mr. Caron does not need all of the income for living expenses, income tax could be deferred and ultimately reduced because the incorporated business would benefit from preferential tax rates for small businesses with active business income. 2. Mr. Caron could use the corporation to split income among family members and/or to achieve an
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Unformatted text preview: estate freeze if the corporation is structured appropriately. 3. If the corporation can be considered as a qualified small business corporation, any gain on the eventual disposition of the shares could be tax free up to the $750,000 lifetime capital gains deduction. 4. The business might benefit from non-tax advantages such as limited liability. 5. It may be easier to obtain the additional needed financing through the use of the corporate form of organization....
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