MarisolAgosto Week7
Applied Business Law Week 7 Marisol Agosto
Everest Online University
Instructor
Shawn Gearhart
Northwest Brands, Inc. is a small business incorporated in Minnesota. Its one class of stock is owned by twelve members of a single family. Ordinarily, corporate income is taxed at the corporate and shareholder levels. Is there a way for Northwest Brands to avoid this double-income taxation? Explain your answer. Yes there is a way for Northwest Brands Inc. to avoid this double income taxation by choosing to be treated as an S corporation. To qualify for S corporation status, the corporation must meet the following requirements: Be a domestic corporation, only have only one class of stock, no shareholder of the corporation may be a nonresident alien, the corporation must not be a member of an affiliated group of corporations, the corporation must have no more than one hundred shareholders and the shareholders of the corporation must be individuals, estates, or certain trusts and Northwest Brands, Inc. meet all of the above requirements. S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income.
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References
Business Law Text & Exercises 7th Edition Roger LeRoy Miller/ William Eric Hollowell
www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporations
Everest Online University
Instructor
Shawn Gearhart
Northwest Brands, Inc. is a small business incorporated in Minnesota. Its one class of stock is owned by twelve members of a single family. Ordinarily, corporate income is taxed at the corporate and shareholder levels. Is there a way for Northwest Brands to avoid this double-income taxation? Explain your answer. Yes there is a way for Northwest Brands Inc. to avoid this double income taxation by choosing to be treated as an S corporation. To qualify for S corporation status, the corporation must meet the following requirements: Be a domestic corporation, only have only one class of stock, no shareholder of the corporation may be a nonresident alien, the corporation must not be a member of an affiliated group of corporations, the corporation must have no more than one hundred shareholders and the shareholders of the corporation must be individuals, estates, or certain trusts and Northwest Brands, Inc. meet all of the above requirements. S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income.
.
References
Business Law Text & Exercises 7th Edition Roger LeRoy Miller/ William Eric Hollowell
www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporations
References: Business Law Text & Exercises 7th Edition Roger LeRoy Miller/ William Eric Hollowell www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporations