An important provision is that each person can give $12,000 per year per donee free of gift tax.

Please see attached. This problem is about the gift tax. An important provision is that each person can give $12,000 per year per donee free of gift tax. (It was $10,000 for years before 2002.) Mark & his wife owned all of the units (like shares of stock) in a limited liability company (LLC). Mark is the LLC manager (like president & CEO of a corporation), & the operating agreement (like bylaws of a corporation) allows the manger to determine distributions to the owners if there is LLC income, but losses are anticipated for several years. Also, the LLC members (owners) cannot sell their units or withdraw from the LLC without the managers permission. The manager can be replaced or th... click for more

Tax advantages and disadvantages of business types

We have elected the S corporation form of business. Now we are not sure this was the best business structure for us from a taxing perspective, and we would like a written comparison discussing the tax advantages and disadvantages of the C corporation, S corporation, and partnership forms of business. Also we would like a recommendation based on your findings, which we will use for future business considerations. Attached are some information about the S-Corp.

How to calculate state payroll withholding taxes based on the chart provided.

Tax Table BIWEEKLY PAYROLLS Single If wages are Vermont withholding is over but not over $0 $102 $0 of amount over 102 1,289 0 + 3.60% $102 1,289 2,964 42.73 + 7.20% 1,289

Carol recently incorporated her sole proprietorship and is considering making an S election.

Carol recently incorporated her sole proprietorship and is considering making an S election. The corporation generates $200,000 of gross revenue and incurs expenses of $75,000, before paying Carol's salary. She plans to take a gross salary of $60,000 from the business, and this will be her only income for the year. Task: Compare the total tax burden for Carol and the corporation with and without the S election. Consider both income and employment taxes. Carol is single and does not itemize her deductions. She plans to reinvest the corporation's net income after taxes into the business. Based on the tax burden alone for 2005, should Carol make the selection? Support or defend your opin... click for more

Richard plans to invest $100,000 for a 50 percent interest in a small business. His friend Jack will also invest $100,000 for the remaining 50 percent interest.

Richard plans to invest $100,000 for a 50 percent interest in a small business. His friend Jack will also invest $100,000 for the remaining 50 percent interest. On their investment, they expect to generate 10 percent before-tax return the first year. Richard's marginal tax rate is 33 percent, and Jack's marginal tax rate is 35 percent. They need to decide whether to establish the business as a partnership or as a C corporation. 1. If they establish a partnership, compute the after-tax cash flow for each partner if each of them withdraws $4,000 from the profits of the business the first year. What is the amount of cash that remains in the partnership, exclusive of employment taxes. 2. I... click for more