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?

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Definitions:

Authoritarian

A leadership style characterized by individual control over all decisions and little input from group members, often involving strict rules and regulations.

Expatriates

Employees who are temporarily or permanently living and working in a country other than their native country.

Third-Country Nationals

Employees who are working in a country that is neither their home country nor the country of the company for which they work.

Host-Countries

Nations that host individuals, businesses, or events from other countries, often in the context of international business or sports events.