A&B (two individuals) wants to organize an entity to combinetheir two businesses. Assume the...

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Accounting

A&B (two individuals) wants to organize an entity to combinetheir two businesses. Assume the business will average $1 millionof taxable income from the combined businesses. What entity wouldyou advise your client to form? Please include in your discussion acompare and contrast of the different forms of business regimesincluding a discussion of a corporation, an S corporation,partnership and a limited liability company. Also, include in yourdiscussion the different tax consequences between the differenttypes of entities including which of these regimes requires thebusiness entity to pay tax on the income earned and which of theseregimes requires the entity owners to pay tax on the income earnedby the entity.
Discuss the short term vs. long term benefits / detriments ofeach form of business regime.

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Partnership Since in the given scenario there are two individuals involved and the business is going to be owned and operated by more than one individual they can structure their business as Partnership There are two forms of partnership The General Partnership and Limited Partnership Assuming both the partners would be actively managing the organization the General Partnership would be a better choice With respect to the tax treatment enjoyed by the Partnership Firm it does not pay taxes on its income but passes through any profits or losses to its individual partners Here each partner is required to report his or her share of income in the prescribed schedule to the IRS Inernal Revenus Service One of the See Answer

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In: AccountingA&B (two individuals) wants to organize an entity to combinetheir two businesses. Assume the business...A&B (two individuals) wants to organize an entity to combinetheir two businesses. Assume the business will average $1 millionof taxable income from the combined businesses. What entity wouldyou advise your client to form? Please include in your discussion acompare and contrast of the different forms of business regimesincluding a discussion of a corporation, an S corporation,partnership and a limited liability company. Also, include in yourdiscussion the different tax consequences between the differenttypes of entities including which of these regimes requires thebusiness entity to pay tax on the income earned and which of theseregimes requires the entity owners to pay tax on the income earnedby the entity.Discuss the short term vs. long term benefits / detriments ofeach form of business regime.