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:

Majority Leader

A legislative position held by a member of the majority party in a legislative body who directs the legislative agenda and strategy of their party.

Minority Leader

The head of the minority party in a legislative body, responsible for coordinating the party's strategy and opposition.

Casework

The assistance provided by members of Congress to their constituents in dealing with governmental agencies and resolving issues or concerns.

Standing Committees

Permanent committees in legislative bodies that focus on specific areas of public policy, such as finance or agriculture.