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1. From a revenue perspective, and disregarding other manages such as limited liability, does it always make sense to operate businesses in a come apart business entity? When might it be emend to be a fillet of bushel proprietor? The issue here(predicate) is if it always makes sense to operate businesses in a enjoin business entity and when might it be better to be a sole proprietor. According to Smith, Harmelink & Hasselback. Federal task income: citywide Topics. CCH, 2013. Pg 14-3-4 a C spate is a separate taxpaying entity. All its income and expenses are reported on from 1020 and it pays a tax that ranges from 15 percent to 39 percent. The shareholders are non potential for a tax based on the corporations income. However, shareholders must tell apart dividend distributions in their taxable income. It also states a disadvantage of a C corp. is double receipts. Based on this information it does not always make sense to operate businesses in a separate entity. Smith states that sole proprietors avoid double receipts and is taxed at a personal level. The tax rate for sole proprietors is from 10 to 35 percent opposed to the C corp. 2. To deplume capital, corporate officers have two basic sources of funding from which to demand: (1) debt (i.e., issue bonds, take out a loan) or (2) candidness (i.e., issue more stock).

What are the trade-offs between these two in truth different sources of capital? Consider tax and nontax factors. The issue here is to determine the trade-off between the capital complex body part of debt and equity in a corporation. Smith, Har melink & Hasselback. Federal tax income:! encyclopedic Topics. CCH, 2013. Pg 14-18-19 states that the corporation should issue long-term debt because debt has certain advantages over equity. amuse payments on the debt are deductible by the corporation season dividends are not deductible. Repayment of the principal is tax drop by the wayside to the creditor, whereas payments made to shareholders for their stock whitethorn be considered dividends or taxable...If you demand to get a wax essay, order it on our website: BestEssayCheap.com

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