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:

Antianxiety Drugs

Medications used to alleviate symptoms of anxiety disorders and reduce feelings of unease.

Central Nervous System

The central nervous system consists of the brain and spinal cord, serving as the primary processing center for the entire nervous system and controlling the functions of both the body and mind.

Tardive Dyskinesia

A neurological disorder characterized by involuntary, repetitive movements, often resulting from long-term use of certain antipsychotic medications.

Antipsychotic Drugs

Medications used to treat psychotic symptoms such as hallucinations, delusions, and disordered thinking associated with psychiatric disorders like schizophrenia.