Brown Company Recently Has Been Formed as a Limited Liability

question 5

Essay

Brown Company recently has been formed as a limited liability company (LLC). Brown Company is owned equally by three individuals-Gene, Susan, and Sandra-all of whom have substantial income from other sources. Brown is a manufacturing firm and expects to earn approximately $130,000 of ordinary income and $30,000 of long-term capital gain each year for the next several years. Gene will be a full-time manager and will receive a salary of $60,000 each year. What tax issues should the owners consider regarding the LLC's initial year of operations?

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Definitions:

Republic

A form of government in which power resides in elected individuals representing the citizen body and government leaders exercise power according to the rule of law.

Midpoint

A point that is exactly in the middle between two other points.

19th Century

The period from 1801 to 1900, marked by significant political, cultural, and technological changes worldwide.