- quote -

I find most clients agree with you. I leave the decision to
them since they have to live with the consequences. I am
sure you do the same.

- quote -

Yes this is a problem some of my SE clients have. On the
other hand I have corporate clients where they just can't
get balanced books and won't pay for an outside bookkeeper.
They just can't understand why they can't list out the
income and expenses the way their friends (who file Sch C)
do. I don't consider these to be tax issues but they are
important considerations when deciding on entity type.

- quote -

You have difficulty because one is not needed. The
Regulations make this clear. Just use the SS# same as on
sole proprietor's.

- quote -

I don't see this as much of an issue. I don't think IRS
matches with corporate returns. Even if they do most
customers don't issue them so the amount on 1099s is almost
always less than the amount actually received (the
exceptions being those consultants with only a few
customers). In any case this is not such a problem to
resolve as to give up the advantages, if any , of an SMLLC.

Drew Edmundson, CPA (NC)
e-mail is my first name at nccpa dot com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Frederick Jorden" <fejcpa[at]erols.com> wrote:
- quote -

Inter-family transfers come to mind even when done at arms
length. Granted most non-related parties want an asset
purchase but not in all cases. Besides, Drew did ask for a
tax reason.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Dave Woods, EA" <d.woods[at]verizon.net> wrote:
- quote -

I agree this is a reason. In 19 years of public accounting
I have only seen one stock sale. That was a biotechnology
startup. The traditional mom and pop small business hardly
ever sells the stock. I also find most of the gain from the
sale of a small business is goodwill which is taxed as
long-term capital gain.

Solo consultants seldom have saleable businesses so while I
agree with your point I don't think it should carry much
weight in the tax evaluation.

But your point is well taken.

Drew Edmundson, CPA (NC)
e-mail is my first name at nccpa dot com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Dave Woods, EA wrote:
- quote -

That assumes you can find someone willing to buy the stock.
Most acquisitions are best handled by purchase of specified
assets and perhaps assumption if some specified liabilities.

--
Frederick E. Jorden http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207 Richmond, VA 23235-5247 EMAIL knowtax[at]bigfoot.com
(804) 320-6210 FAX (804) 320-6211

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Drew Edmundson" <cfdaqw[at]nccpa.com> wrote:
- quote -

I'll give you a tax reason. Sale of the business. If you
sell a SMLLC, you have to allocate proceeds to the various
components of the business. With an S-Corp, you at least
have the ability to sell the business as stock, and thus all
cap gain instead of the possibility of having ordinary
income recognition on various assets.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Gene E. Utterback, EA" <eagent[at]alliancetax.com> wrote:

snip

- quote -

I am curious as to why you say a SMLLC is not very
attractive. Other than the FICA game I don't see any tax
advantage to an "S" corporation. The tax downsides to an
"S" corporation include franchise taxes, unemployment taxes
on the owner, and inability to hire your under 18 children
FICA tax free.

I see possible legal issues but please restrict your
discussion to tax matters since that is how you made your
statement.

Drew Edmundson, CPA (NC)
e-mail is my first name at nccpa dot com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Christopher Green" <cj.green[at]worldnet.att.net> wrote:
- quote -

Your issue aside, my professional recommendation for
virtually ALL solo consultants is to form an S corporation
anyway. A SMLLC is not very attractive from a tax
standpoint.

Gene E. Utterback, EA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Dave Woods, EA" <d.woods[at]verizon.net> wrote:

[snip]
- quote -

It comes up in computer consulting work regularly. Many
clients will deal with consultants only as corp.-to-corp. or
as a W-2 employee; they will not deal with a consultant whom
a 1099-MISC must be prepared for. This can be because they
believe it reduces the risk of the consultant being
reclassified as an employee, or just out of bureaucratic
inertia.

Since an LLC is not a corporation, even if it's taxed as
one, I've never seen anything to convince me that forming an
LLC relieves the 1099-MISC requirement. Thus solo
consultants regularly form S corporations. If somebody has a
reference to a regulation, or even a publication or
instruction, I'd be pleased to see it.

--
Chris Green

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"varkiliy_jar" <vteslikov[at]hotmail.com> wrote:

- quote -

No idea what you are talking about.

- quote -

If you're referring to whether or not an LLC taxed as a
corp is excepted from being required to receive 1099-MISC
for services rendered, I'm not sure, more importantly since
presumably you ARE keeping a good set of books, why do you
care?

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

LLC formed in NYC and chosen to be taxed as Corp - can it
avoid 1099 and use Corp2Corp only?

Excuse my brief message, but I can not find any references
and the subject is not brought up first time. Just a little
guess: If LLC is taxed as Corp, and 1099 form is for tax
purposes, logically LLC-as-Corp shouldn't be required 1099.

Thanks.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->