What exactly do you mean by wanting the 2d office to "act as
its own entity and pay its own taxes??"

Certain entities are recognized as separate legal entities
for state law purposes even though they are disregarded for
federal tax purposes, so if all you want is for the 2d
office to have a separate legal existence for purposes other
than federal tax laws, that's easy to do.

For example, since you already have an S-corp, you could
incorporate a 2d corporation and make the election for the
2d corp. to be treated as a qualified subchapter S
subsidiary of the S-corp. That way, since it's a corp under
state law, you have the usual state law treatment (separate
legal entity); subject, of course, to any restrictions state
law may impose. Since it's a QSub for federal tax purposes,
however, it is a disregarded entity, and may thus use the
parent S-corp's identification number.

As to separate payment of taxes, do you mean that you want
the 2d office to bear the economic burden of the taxes
attributable to its operations, or that you want only that
office to be legally liable for payment of such taxes to the
exclusion of anyone else? If the former, then it's more a
matter of book-keeping than legal structure - the office
would simply distribute funds for payment of the tax to
whomever had the legal liability to pay the taxes (or,
alternatively, the office could simply send payment directly
to the IRS on behalf of the person with the legal
liability).

However, if you want the 2d office to be treated as a
separate taxpayer by the IRS, then it will have to have its
own identification number.

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I ran into this problem once a while back and it was the
most frustrating thing I ever dealt with. It's not a tax
problem, not a tax problem, not a tax problem. It's the
&%$#**& health insurance industry that's got a problem and
that's intransigent arrogance and administrative
head-in-the-sand know-nothing-ism. Sorry for the rant; it
still - obviously - rankles me. Actually I get so "het up"
about this I don't remember the "solution" or even if there
was an acceptable "solution".

The two different taxable entities - one an S corp and one a
partnership - must have and use different ID#s for tax
filing purposes. Tell the insurance folks to get their act
straight.

LoTax

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

Your best course of action is to consult with a local
business attorney and/or CPA to help you with selecting the
appropriate and best type of entity for the second office.
There are numerous considerations such as limiting
liability, taxation, ease of entry/exit from the entity for
new 'partners', abiltiy to move assets into/out-of the new
entity, etc. Choice of entity is clearly not a decision to
be taken lightly. The magnitude of this decision is
probably amplified given the nature of the business (i.e.,
medical practice). Choice of entity may even affect other
business decisions and costs such as malpractice insurance
premiums.

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alocker[at]bellsouth.net wrote:

- quote -

The only thing I can think of is that the two entities
become a partnership and obtain a tax id for the partnership
to use for insurance purposes. As far as tax, each
organization could be entitled to income (and pay tax) in
proportion to, for example, its net income.

Stu

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We presently have a medical type office and would like to
open up a 2nd. THe 1st office is an S-Corp with the
original owner. The second office is to be a partnetship
with the original owner and a new partner. For insurance
billing purposes the 2nd office needs to be able to use the
original companies tax ID#. But we want the 2nd office to
act as it's own entity and pay its own taxes. I understand
this is a bit confusing. How is this done, or can this be
done and if not how would you get arround this? The offices
are in Florida. I can explain more if necessary or to clear
up any confusion. Please help.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >