Your client is contemplating changing from a sole proprietorship to a C corporation. He has heard...

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Finance

Your client is contemplating changing from a sole proprietorshipto a C corporation. He has heard the terms \"book to taxdifferences,\" \"dividends received deduction,\" and \"differences inthe charitable deduction,\" but would like a detailed discussionfrom you. What would you tell your client with respect to financialand corporate taxation? Discuss the differences, in detail, betweena sole proprietorship and a corporation in how they treat \"book totax differences\", \"dividends received deduction\", and \"differencesin the charitable deduction\", by not only defining the terms, buthow they are treated for both entities including any differences inthe calculation of charitable deductions between the twoentities.

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While numerous transactions are dealt with equivalence for both financial and tax purposes there are different transactions that because of the nature or timing are dealt with in a different way These are termed as booktotax differences These booktotax differences occur mostly under the heads of depreciation and amortization inventory reserves accrued accounts and the like Accounting for a sole proprietorship doesnt require a different arrangement of bookkeeping records since the proprietor is viewed as indistinguishable from the business However in the case of a corporation business is considered to be separate from its owner hence the See Answer

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