Aubrey Has Been Operating His Business as a C Corporation

question 94

Essay

Aubrey has been operating his business as a C corporation for the past 5 years. The corporation pays him a reasonable salary. The profits of the corporation, after paying Federal income tax, are distributed to him each year as a dividend. He is considering electing S status for his corporation in order to avoid double taxation. What factors should he consider assuming after-tax earnings will continue to be distributed to him?

---

Definitions:

Depression

A common and serious medical illness that negatively affects how one feels, thinks, and acts, leading to feelings of sadness and/or a loss of interest in activities once enjoyed.

Anorexia Nervosa

An eating disorder characterized by an obsessive fear of gaining weight, leading to severe restrictions on food intake and extreme weight loss.

Fatal

Resulting in death or having a very severe outcome with irreversible consequences.

High-Fat Foods

Refer to foods that are rich in fats, often associated with increased calories and potential health impacts when consumed excessively.