Tag Archive for LLCs

Five Fundamentals Of A Limited Liability Company (LLC)

Haik Chilingaryan, Five Fundamentals Of An LLC

A Limited Liability Company (“LLC”) is a hybrid business entity which contains elements of a partnership and a corporation. LLCs consist of members and managers. An LLC may provide tremendous benefits for its members, which include asset protection, intergenerational transfers, tax saving strategies, wealth preservation, flexible management structures, and clarity on the roles of all essential parties involved in the company as set out in the Operating Agreement.

The following five concepts are fundamental for establishing an LLC: Asset Protection, Intergenerational Transfers, Tax Saving Strategies, Management, and Funding.

Asset Protection

Generally, the more assets a person owns in one’s name, the more likely it is that he or she will be a target mark for creditors. This is why it’s good practice to own as little as possible in your own name. In order to accomplish this goal, it’s important to evaluate the types of asset protections tools that are available to you. An LLC is one such tool that is effective for asset protection purposes.

For creditors of the LLC itself, a member’s personal liability will generally be limited to the amount of the member’s investment in the LLC unless the member personally guarantees the transaction in question.

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Written by | Posted in Asset Protection • LLC • TaxConnections

Unused LLCs And Corps

Why do you keep forming LLCs, partnerships or any kind of corporation when you’re not really ready to do business?

Then, you have these legal entities, with stringent tax filing responsibilities – and you do nothing.

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Written by | Posted in Corporate

Important Change: When are Corporate/Partnership Tax Returns Due?

Monika Miles

Do you take notice when it comes to new California tax laws and updates? Here is one that taxpayers and tax preparers alike will want to pay attention to.

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Written by | Posted in Corporate • Partnership • State Tax • Tax Return

Knowing Your S-Corporation Basis

Knowing one’s cost basis in an S Corporation is a vital issue for most owners of S corporations. However, to many such shareholders, basis is not understood and not known. Part of the confusion arises from the fact that S Corporations, LLC’s, and partnerships face two different basis numbers – inside basis and outside basis. Both are important, but the outside basis is more likely to become an issue annually for the shareholder. Shareholders may not deduct losses from the corporation in excess of their outside basis.

Inside basis is basically the balance in the owner’s capital account. It is the ownership interest in the corporation, but not necessarily what that ownership interest cost. Inside basis is maintained on the corporate books. It represents: Read More

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S Corporations Beat-Out LLCs For Americans Carrying On Business In Canada

As a general rule, U.S. residents are only subject to Canadian tax on business income to the extent that such income is earned via a permanent establishment (“PE”) in Canada(1).

If a U.S. C corporation earns profits that are taxable in Canada, such profits will be subject to federal corporate taxation under Part I of the Income Tax Act (“the Act”) at a rate of 15%, plus, assuming there is a PE in a province, provincial corporate taxation at varying rates. For example, in Ontario the rate is 11.5% and in Alberta the rate is 10%, thereby resulting in combined corporate tax rates of 26.5% and 25%, respectively(2).

In addition, a U.S. corporation earning income from carrying on business in Canada may also be subject to the “branch tax” that is levied under Part XIV of the Act. This tax is quite Read More

Written by | Posted in Corporate • International

S Corp – Charitable Donations

The most intriguing aspect of maintaining this tax blog is the pleasure of meeting and engaging a wide variety of successful people all with the courage to take the risk of venturing out on their own profession in pursuit of dreams and aspirations. Sharing with me the lessons learned through experiences chalked up to enduring hard knock after hard knock I have learned from my readers and subscribers along the way of which I am profoundly thankful.

I couldn’t help but notice that many of my friends and clients alike, particularly those of you in the business of providing services to the community, have become successful beyond anyone’s wildest expectations and are now more prepared than ever to accept the significance of gifting in the greater scheme of life’s affairs. Because people that read my Read More

Written by | Posted in Corporate • Tax Deductions