The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/you-might-be-asking-a-couple-of-different-things-20734403.aspx

Subject:  Re: Corporation - S Corp? Date:  5/6/2004  12:13 PM
Author:  Wradical Number:  71752 of 123001

You might be asking a couple of different things.

A PC, as you refer to it, is probably a different kind of corporation, under state law, where eligible shareholders are restricted to licensed professionals. The rules on this vary somewhat from state to state. And they use different names, professional corp., service corp., etc.

There is nothing in the federal tax laws that keep such a corporation from making an S election, as long as the shareholders are individuals or qualified trusts. I'm thinking that typically a PC has to have individuals as shareholders.

For a new business, the advantages to being a C corporation are rapidly disappearing. The few advantages that remain are in the fringe benefit area. Owners can have a medical reimbursement plan, participate in a cafeteria/flex benefit plan. That's about it. Self-employed owners, partners, S-Corp shareholders, can all deduct their health ins