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R.D. Barnett PLLC

C-Corporation Tax

Contact Us 206.347.8000

Did you know that despite their double tax regime, C-Corporations have a time and a place? C-Corporations are also popular with large contractors, sub-contractors, and some service providers who are willing to sacrifice double taxation for the ability to raise capital and take their companies public.  C-Corporations can be a useful tool for foreign investors wanting to invest in the U.S.; often being incorporated either in the U.S. or overseas.

We are here to help you navigate the following issues and prepare your corporate tax return…

  • Incorporating a Business:  Understanding the advantages and disadvantages as compared to other entity choices, subject to double tax, organizational costs, and start-up expenses.
  • Capitalizing a Corporation:  Taxable and nontaxable formation, transferring accounts receivable and liabilities, impact on assumption of liabilities, gain recognition from boot, basis and holding periods, control, and qualified small business stock.
  • Using Multiple Corporations:  Controlled groups, consolidated groups, and separate return limitation year rules.
  • Selecting Accounting Periods and Methods:  Choosing a tax year, personal service corporations, cash vs. accrual, long-term contracts, beneficial inventory method, depreciation and amortization, bad debt deductions, capitalized costs, and domestic producer’s deduction.
  • Reducing Alternative Minimum Tax "AMT":  Qualifying small business stock, AMT exemption, deferring or accelerating income, and elections to avoid AMT adjustments and preferences.
  • Avoiding Penalties:  Avoiding personal holding company status, paying dividends, understanding accumulated earnings tax, and avoiding the flat 35% tax rate on personal service corporations.
  • Interacting with Shareholders:  Loans from shareholders, imputed income, constructive dividends, leasing property, reasonable compensation, employing family members, related-party rules, working condition fringe benefits, and noncompete agreements.
  • Handling Nonliquidating Corporate Distributions:  Qualified vs. nonqualified, cash or property, proportionate or disproportionate, return of capital, and partial liquidations.
  • Shifting Control:  Succession planning, gifting of stock, involvement of trusts, and selling of stock.
  • Planning Tax Free Reorganizations:  Acquisitive, divisive, debt-for-equity swap, bankruptcy, step-plan transaction doctrine, insolvency, and change of identity, form or place.
  • Liquidating the Corporation:  Distributing cash or property, impact to corporation and shareholders, and deferring gain on installment notes.