The current taxation of business operations is a visible recurring focus of tax planning. Using a particular legal entity is a significant factor in this planning process. This course considers the comparative federal tax consequences of operating the business as a partnership entity or a corporation with or without an S corporation election.
Learning Objectives
• Identify and evaluate differences in tax rates applicable to corporations and individuals
• Analyze the significance of differences between the corporate and individual treatment of capital gains and losses
• Understand the importance of the self-employment tax and FICA/ Medicare taxes
• Identify and analyze tax planning opportunities using differences in tax rates
Major Topics
• Basics of the taxation of partnerships, S corporations, corporations not making the S election
• Tax rates applicable to taxable income reported by a corporation not making the S corporation election
• Tax rates applicable to ordinary taxable income of partnerships and S corporations which is allocated to individual taxpayers
• Tax rates applicable to long term capital gain allocated to individual partners or shareholders of S corporations
• Comparison of corporate and individual tax rates
• Tax planning opportunities using differences in tax rates
• Comparison of tax savings for losses based on the choice of entity
• The self-employment tax and FICA/ Medicare taxes
• The individual alternative minimum tax
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