Liquidating distribution cash proceeds taxed
Although C corporations are the most expensive entity to start, operate, and maintain, they do have many advantages.
A C corporation can offer many fringe benefits that are taxed less than they would be under sole proprietorships, partnerships, limited liability companies (), and S corporations.
In the case of a Roth IRA, earnings accumulate tax-free.
For substantial accounts, that can add up to a monstrous income tax bill -- unless the IRA is a Roth, in which case, taxes were paid before money went into the account.Small business corporations are either C or S corporations — these designations refer to the subchapters of the tax code that governs them.C corporations are governed by 26 USC Chapter 1, Subchapter C - Corporate Distributions and Adjustments.Additionally, funding for the corporation can be increased by selling shares of stock.However, the tax advantages must be weighed against a greater complexity of operations, complex tax rules, and legal and accounting costs.