1. Dave and Cindy, who want to start a law firm, each have$1,000 to invest in the business and no personal assets and wantlimited liability protection and only 1 level of taxation. Theywant your advice on whether they should form their law firm as: 1)a general partnership; or 2) a limited liability corp (LLC) Whatbusiness entity would you recommend? Why?
2. Karen, who is setting up a new business, expects that her newbusinessâ income in the first year will be $10,000. If the businessis a C (regular) corporation assume it has distributed $5,000 ofits $10,000 income to Karen as a dividend. Corpâs income tax rateis 35%. Karenâs income tax rate is 30% and her dividend tax rate is20%. For federal income tax purposes, how much would be the incometaxes paid on her businessâ projected income if Karenâs businesswas a C (regular) corporation or was a sole proprietorship?
1. Dave and Cindy, who want to start a law firm, each have$1,000 to invest in the business and no personal assets and wantlimited liability protection and only 1 level of taxation. Theywant your advice on whether they should form their law firm as: 1)a general partnership; or 2) a limited liability corp (LLC) Whatbusiness entity would you recommend? Why?
2. Karen, who is setting up a new business, expects that her newbusinessâ income in the first year will be $10,000. If the businessis a C (regular) corporation assume it has distributed $5,000 ofits $10,000 income to Karen as a dividend. Corpâs income tax rateis 35%. Karenâs income tax rate is 30% and her dividend tax rate is20%. For federal income tax purposes, how much would be the incometaxes paid on her businessâ projected income if Karenâs businesswas a C (regular) corporation or was a sole proprietorship?