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Tag: Choice of Entity

Tax Planning With Disproportionate Distributions from S Corporation

There are several rules one has to meet for a legal entity to qualify as an S corporation. One of the rules is the requirement that shareholders of S corporations get identical distributions. Because this is a qualification to be an S corporation, one might think that the consequence of violating this rule is that… Continue reading Tax Planning With Disproportionate Distributions from S Corporation

The post Tax Planning With Disproportionate Distributions from S Corporation appeared first on Houston Tax Attorneys | Mitchell Tax Law.

August 10, 2024
Limited Partners May be Subject to Self-Employment Tax

When we think of taxes, we often think of income taxes. But for business owners, they also have to contend with payroll and/or self-employment taxes. These other taxes can be substantial for businesses and their owners. This is why Congres and taxpayers have devised several ways to avoid these taxes. The rules are nuanced enough… Continue reading Limited Partners May be Subject to Self-Employment Tax

The post Limited Partners May be Subject to Self-Employment Tax appeared first on Houston Tax Attorneys | Mitchell Tax Law.

December 3, 2023
Forget the 5-Year Rule – Change Entity Classification Early

Many believe that once you elect an entity’s tax classification, you are locked into that choice for at least 5 years. Conventional wisdom says that the tax status cannot be changed within a 5-year or 60-month period. However, a recent IRS private letter ruling shows this is not necessarily the case. In PLR 202341001, the… Continue reading Forget the 5-Year Rule – Change Entity Classification Early

The post Forget the 5-Year Rule – Change Entity Classification Early appeared first on Houston Tax Attorneys | Mitchell Tax Law.

October 15, 2023
Choice of Entity: Tax Plans for Pharmacies

Our laws have long said that taxpayers are free to structure their legal affairs to minimize their taxes. Congress has even provided very specific provisions to accomplish this. Section 1202 stock is an example. This provision is intended to encourage start-ups to take business risks by rewarding those who are successful by allowing them to… Continue reading Choice of Entity: Tax Plans for Pharmacies

The post Choice of Entity: Tax Plans for Pharmacies appeared first on Mitchell Tax Law.

May 30, 2022
Qualifying for Section 1244 Stock Losses

The Tax Cuts & Jobs Act of 2017 changed the choice of entity decision quite a bit. It affords corporate taxpayers the benefit of the lower flat 21 percent tax rate. It provides non-corporate businesses a 20% qualified business income deduction. There were other changes too. This is in addition to the existing tax rules… Continue reading Qualifying for Section 1244 Stock Losses

The post Qualifying for Section 1244 Stock Losses appeared first on Mitchell Tax Law.

August 29, 2021

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