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I'm the founder of a startup that has 3 co-founders. I've

Hi there,I'm the founder of a startup that has 3 co-founders. I've already begun as an LLC because i figured i would appreciate the freedom of structure, but now i fear i haven't set myself up for angel investing and paying myself/partners with the money already invested.Currently theres 5k invested between us (not a lot but we just started a few weeks ago) and i'm thinking we should be a c-corp instead so i can pay ourselves (even minimum wage) incase we 'break up' and they feel entitled for compensation.basically, we're a startup that has the business model of a subscription box company, i haven't paid anyone for work yet, have promise 5% to each of them, and am not sure if i should have signed up for a c-corp, s-corp or LLC.cheers

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,026 satisfied customers
Question on tax treatment of capital gains in the final year

Question on tax treatment of capital gains in the final year of a trust.A marital deduction trust was created in 1998 upon the decease of a husband. The trust invested in a diversified stock portfolio and has remitted all dividend income generated over the years to the income beneficiary, the surviving widow. Per the trust document, capital gains and/or principal may be remitted as well if needed by the widow , but over the life of the trust this was never necessary or done.Each year, capital gains and losses from transactions in the trust were offset, or loss carryforwards used, to zero out the trust's capital gains and losses on the trust's tax return. Income was reported on K1 to the income beneficiary who paid income taxes on it.The income beneficiary passed away this year (2016), the stock portfolio was entirely liquidated, generating net capital gains, and the trust assets (all cash now) will be distributed to the designated heirs/beneficiaries. (There are two children and four grandchildren.)Questions:1. Must the trust itself pay the taxes on the final-year capital gains generated?2. I believe it is not permitted to remit net capital gains to the beneficiaries in this case. True?3. Instead may we remit gross gains and losses to the beneficiaries, some of whom have a lower tax rate? (I believe so)4. Do we have discretion on which approach to use? If both ways are permitted, does the IRS look on the latter approach, with its lower tax result, as particularly aggressive, a red audit flag, etc.?Background:I'm no expert but the online commentary on the Regs do suggest that the trust may remit the gross capital gains, reporting on a K1, pro rata to the remainder beneficiaries, and also remit the gross losses in the form of loss carryforwards that each beneficiary can apply against their share of gains, all of this on their personal tax returns in the same year, 2016. I get this from online commentaries on §1.643(a)-3(b) and §1.642(h)-1.(It is assumed that the ordinary income (dividends) generated by the trust after the widow's death will be distributed to the remainder beneficiaries, who will pay income tax on it.)

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,026 satisfied customers
I own and operate an S-corp and am the only shareholder.

I own and operate an S-corp and am the only shareholder. Late last year, I accepted a job as a freelance writer and accepted payment individually rather than through the company. What I thought was a one-time project has turned into regular contract work (I produce written content for the client roughly once a week). Now I'm thinking I should have taken the job as my corporation, rather than individually. So two questions: 1). Is there any advantage to reporting this income as S-Corp income as opposed to personal income? and 2). Can I change the designation to corporate income? Even though I took the assignment last Oct. I did not receive any payment until January so none of the income has been yet reported.Thanks.JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?Customer: Don't think so.

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PDtax

Owner

Master's Degree

6,996 satisfied customers
What's the best way for a C-Corp to handle expenses paid out

What's the best way for a C-Corp to handle expenses paid out of pocket by an officer on behalf of the business if the business can't afford to reimburse that officer in the year the expenses were incurred? Can those expenses be deducted from the C-Corp return offset by a loan for the director?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,772 satisfied customers
C Corp business owner here. Can I take myself off payroll

C Corp business owner here. Can I take myself off payroll for the last four months of the year and declare my income as self-employment, even if it does come from the same place?

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,026 satisfied customers
I live in New Hampshire and I will be starting a software

I live in New Hampshire and I will be starting a software consulting company and I have the following questions:1- Should I go for an S-Corp and provide myself a salary so that I can save on FICA or should I just go for an LCC and be taxed 15% + profit tax?2- Should I register the company in Delaware (flat state annual fee of $300 + registered agent fee of $50) or should I do it in NH but I will have to pay %8 on the corporate profit?3- I will be working in all the states and probably not in NH. If I were in a state that has state tax, I will probably get double taxed but will get a credit from my state but in NH there is no state tax, so there is no way to get a credit.4- do I have to pay taxes in all the states where I work?thanks

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,026 satisfied customers
1) Which legal structure do you recommend? Why? 2) Can this

1) Which legal structure do you recommend? Why?2) Can this legal structure be changed once it has been established?3) Should the business be formed in or out of state? Why?4) What are the tax implications of the legal structure recommended?5) Will I need an employer identification number (EIN)?6) Should I open a business bank account, or will my personal account be sufficient? Why?7) Do you recommend using accounting software? Why?8) What are the strengths and weaknesses of this business form?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,772 satisfied customers
Need to understand the best structure for my situation

need to understand the best structure for my situationHusband: W2 income $300k+Wife: 1099 income $300k+Wife has a company : income expected 400k+ what are the pros or cons of making it a C or S corp

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,772 satisfied customers
I'm a independent contractor (a Realtor) who has worked in

I'm a independent contractor (a Realtor) who has worked in FL for several years and formed a S Corp in FL to run my business income through. My S Corp name is ***** ***** own name with additional designator of P.A. The realtor licensing laws in FL allow my real estate license to show my corporation name so my income and the 1099 is received in the S corp name. I still do business in FL and will receive a 1099 as usual but I've now moved to TN so this year will also have income and a 1099 from business in TN. However the realtor licensing laws in TN require my real estate license to be in my name (not a corporation) so I am paid in TN with checks made to me personally and will receive a 1099 shwing income in my personal name. I want to run all my business through the S Corp so how best can I handle this at tax time. I also want to pay all checks recieved from FL and TN into my business account.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

17,772 satisfied customers
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