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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11123
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Is there ANY difference at all between a C-corp which has

This answer was rated:

Is there ANY difference at all between a C-corp which has elected s-corp taxation and an LLC which has selected s-corp taxation? Are they treated the same in every way by state and federal law?

Customer:

Firs you have to have to understand that business are incorporate by states. This is done in each state by the secretary of state

Customer:

Keep in mind that When you first incorporate your business in a particular state, you're are generally registering the business as a legal organization in the state of your incorporation.


Customer:

And THAT in of itself isn't a tax issue. It's an issue of limited liability, required record keeping, and the various requirements of state statutes for the various types of business entities in THAT state

Customer:

Generally the potential entities are, Sole Proprietorships (required i SOME states to register as DBA's (Doing Business As), Partnerships, Joint Ventures (usually organized for one specific transaction) LLC (Limited Liability Companie, a hybrid between a corporation and a partnership) and a Corporaton

Customer:

While S corporations are corporations for purposes of state law, not all states recognize the "S" corporation for income tax purposes. The "S" corporation is recognized in Massachusetts but not in New Hampshire for example. S-Corps are really a TAX election ... although again, some states will let you set up the S-Corp initially, you have to MAKE that election for purposes of FEDERAL tax law

Customer:

In most states default corporation is a "C" corporation. If you want to be be taxed as an "S" corporation you have to file form 2553 to let the IRS know that the shareholders desire (elect) this tax treatment.

Customer:

Sorry for the data dump but, to try to answer your question, now that we may be on the same page, .... for FEDERAL TAX LAW purposes there is NO difference .... for contract, tort, criminal, and business organization law they are different from state to state .. they will also vary from state to stat in terms of Tax law too

Customer:

Federal tax law the same

Customer:

State tax and other law, different

Customer:

I still don't see you coming into the chat. I'll switch us to "Question & Answer" mode. ... Maybe that will help.

Customer:

(We can still continue a dialogue there, just not in real-time chat as we can here)

Customer:

While I'm waiting, here's an excellent article on the differences between a C-Corp and an S-Corp ... As you read, however, understand that MOST of the differences covered here discuss the tax differences ( C-Corp being taxed at C-Corp Rates) and the s-Corp being a pass-through to the personal return of the shareholders, ... just as partnerships, Sole Proprietorships and LLCs that don't elect S or C corp taxation are.

Customer:

Hope this Hleps

Customer:

Lane

Customer:

Remember, you can still come back ans ask clarifying questions.

Customer:

But if this HAS given you enough information, I would appreciate either an “accept” or a feedback rating of 3 (OK) or better. That's the only way they will pay us here. HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question

Customer:

Let me know ...

Lane and 4 other Tax Specialists are ready to help you


Thanks Joe,

Let me know if I can help further

Lane




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Thanks again,

Lane