discussion post 684

4-1 Discussion: Business Formation: Aligning Tax Consequences and Business Characteristics Discussion Topic

Task: Reply to this topic

Starts Aug 31, 2019 11:59 PM


this discussion, you will give an example of a hypothetical small

business startup situation and recommend the particular business form

you feel is most appropriate based on the characteristics of the

business in your example and the benefits of your chosen entity, and you

will justify your choice.

Insight gained from this discussion

will be useful in choosing the appropriate business form for the clients

from the final project scenario as you complete Milestone One.


proprietorships, partnerships, limited liability corporations, C

corporations, and S corporations all have distinct potential advantages

and disadvantages for tax purposes. However, potential tax implications

must be considered in tandem with the characteristics of a business and

the expectations and goals of the business owners to ensure the best

choice is made. When working as a financial advisor, one issue that

often arises is the need to assist a new business owner in identifying

the correct form a business should take, mainly for tax purposes.


this discussion, first read the selection from the course textbook.

Using your critical reflection on the reading and all of your knowledge

from the course so far, choose one of the five taxable entities and

present an example of a specific hypothetical startup business situation

for which your chosen entity might be appropriate, given the business

characteristics of the example you provide and the potential benefits a

particular form of entity offers. For example, if you gave the example

of opening a chain of gas stations with three other investors, you would

suggest what type of entity suits the situation and explain your

reasoning. Assume that one of the owners of your hypothetical business

is a Canadian citizen who is not a U.S. resident alien.

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