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Corporation cancels shareholder's debt |
What happen when your Corporation (your business) cancels a loan it made to you?
If a corporation cancels a shareholder's debt without repayment by the shareholder, the amount canceled is treated as a distribution to the shareholder. |
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Deciding Upon Your Corporate Structure |
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So you're trying to decide if a C-Corporation, S-Corporation or a LLC tax structure is better for you? Determining the type of legal structure for a new business can be daunting for entrepreneurs and small business owners. Corporations and limited liability companies (“LLCs”) are preferred business structures because, unlike sole proprietorships and partnerships, both offer liability protection. This means that the owner of a company cannot be held personally responsible for the company’s debts. The personal assets of an owner are shielded from company liabilities. |
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Should I incorporate my business? |
There are many great benefits to incorporating your business.
One primary benefit is LIMITED LIABILITY. If you maintain the corporation's legal status properly, and avoid personally guaranteeing the corporation's obligations, your corporation, and not you, would be solely responsible for its own obligations. |
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Small businesses benefit from Section 179 deduction |
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Typically, if property for business has a useful life of more than one year, the cost must be spread across several tax years as depreciation with a portion of the cost deducted each year.
But there is a way to immediately receive these income tax benefits in one tax year. The provisions of Internal Revenue Code Section 179 allow a sole proprietor, partnership or corporation to fully expense tangible property in the year it is purchased.
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