Transferring of a business Bob has his daughter to take over the business for him. Bob would had left everything up to success and easy transition for his daughter to take in place when
10 Aneley Azcuy-Pita 01/21/2018 it’s time for him to leave. In the case that both Bob and Mandy leave the company, the business will be kept in the family this will go under estate and gift tax. If Bob and Mandy decide to option to “sell outright or gradual” here the details. A selling outright will give more money to Bob and Mandy immediately and business will be concluded. While gradual will take lots of time it might be better to find any buyer since there would not be a rush to pay upfront for the whole business (S elling your business,2017) . In order to keep the S Corporation, the new buyer must qualify for S Corporation shareholder. Bob and Mandy would need to for the last year operating the business to file a corporate tax which include their last year profit and losses on a K-1 form. I Appendix A Prepare the appropriate page of Form 1040 and include the sale of the client’s land on the appropriate tax schedule and form for the recommended business entity. Be certain to complete each tax schedule and form accurately and completely. - See attached documents B. Prepare the appropriate schedule and tax forms to reflect taxable income based on your calculations and the disposition of asset. Be certain to complete each tax schedule and form accurately and completely. - See attached document C Illustrate how creative problem solving and versatility of thought impact professional advice that you intended to result in the best economic solutions for the client. Consider providing real-world examples to support your claims. C corporation Bob will have the opportunity for different investors to invest into the business to grow rapidly. By reviewing all his tax documents and profit he made for the business success.
11 Aneley Azcuy-Pita 01/21/2018 The advantage of a C corporation is that take away a huge negative overweigh on Bob business. This could allow Bob to attract more shareholders for the business future outcome. This option for business will allow Bob company to grow strongly and to make good steady money without the need to get any loans. As a sole proprietor, all profits, losses and expenses need to be reported on Forms 1040 and Schedule C for Bob to determine his income tax. The Schedule SE need to also be completed to record self-employment tax. According to the IRS, Bob is allowing to use 50% deduction (IRS, 2015). Also, the Schedule D (Form 1040) for gain on sale of property must be recorded. On the final decision Bob will remain as a sole proprietor, this will help Mandy to not have any interest distributed to her because the IRS would no longer see this approach as a sole proprietorship but as a partnership. Therefore, the 40% share of interest will be taxed separately on Mandy’s personal income tax returns later when Bob had file his own returns which should include all income, losses and this 40% been taxed. Will cause a double taxation problem for
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- Fall '17
- Business, Corporation, Taxation in the United States