Choice of Entity & Tax Issue Entity Formations: Part 1

Author: Jennifer Kowal

CPE Credit:  4 hours for CPAs
4 hours Federal Tax Related for EAs and OTRPs
4 hours Federal Tax Law for CTEC

Part 1 in a two-part self-study series – this 4 CPE hour course will discuss business advantages and disadvantages of C-corporations, S-corporations, LLCs, partnerships and sole proprietorships.

This Course Reflects Entity Formation Choices and Decisions after the Tax Cuts and Jobs Act of 2017

Choosing which type of entity to use to form and organize a new business can be challenging. One must consider and weigh costs and benefits today vs. the future, without knowing what the future will bring. Often, business concerns suggest one type of entity while tax concerns suggest another. These decisions are also affected by the Tax Cuts and Jobs Act of 2017 with the new 20% passthrough deduction and the lower rate for C corporations. While much of that remains uncertain, Jennifer Kowal will discuss the impact of the tax bill and how it needs to become part of the decision making process in 2018.

This course is excluded from the following subscription programs:
Value Pass, Self-Study Package, Webinar Package, Self-Study & Webinar Package, and Firm Package.

Publication Date: January 2018

Designed For
Tax practitioners at all levels who advise on the tax issues involved in forming business entities.

Topics Covered

  • Business advantages and disadvantages to various business entity structures
  • Tax advantages and disadvantages of various business entity structures
  • Tax treatment of formation transaction for C corporations, S corporations, LLCs and partnerships
  • Potential current and future pitfalls of forming each entity type
  • Potential impact of Tax Cuts and Jobs Act of 2017
  • Overview of Different Types of Entities
  • Employment Taxes and Employee Benefits
  • Entity Classification and Conversion
  • Tax Consequences of Various Entity Formations

Learning Objectives

  • Describe the business advantages and disadvantages of using C corporations, S corporations, LLCs, partnerships and sole proprietorships
  • Identify the tax advantages and disadvantages of each entity type
  • Describe tax consequences to forming various types of entities
  • Describe business structures and how they affect a company
  • Identify advantages of a general partnership business structure
  • Recognize disadvantages with respect to business structures
  • Describe employment tax issues of S Corporations
  • Differentiate stock options in a Corporation
  • Identify proper statements with respect to profits interest
  • Recognize how to evaluate whether there is an entity separate from its owners
  • Recognize types of entities which generally get a choice on tax classification
  • Identify examples of ineligible entities
  • Differentiate statements with respect to partnerships vs. S Corporations
  • Recognize the proper form for filing an annual General Partnership
  • Identify advantages of a C Corporation
  • Describe S Corporations and shareholder limitiations
  • Identify the price at which a stock option holder may purchase a share of stock using the option
  • Identify a partnership interest other than a capital interest
  • Recognize when a publicly traded partnership is generally ineligible
  • Describe which IRS form if an entity wants to elect out of the default classification
  • Recognize which form is not respected by the IRS related to partnership incorporation
  • Identify IRC Sections addresses corporate formation including the consequences, stock, as well as control issues


Instructional Method

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
Basic experience with choice of entity and tax issues involved in entity formations.

Advance Preparation

Registration Options
Regular Fee $83.00

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