Robby wrote:

- quote -

An S corporation can be a member of an LLC. You should
discuss your plans with a qualified legal and tax adviser in
your local area to whom you provide all the relevant
detailed information, but in general, it sounds feasible.

Katie in San Diego

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I have had an S Corporation (of which I am the sole member)
for a few years. Through this corporation I receive payment
(in the form of a fair salary and distributions) for
consulting work I do. I have a SEP IRA through this company
as well and make contributions based on my salary.

I will be setting up a company with a business partner of
mine soon to do consulting services. I will be a 50% owner
of this company. Most of the money I earn from performing
these services will be paid to this company instead of
directly to the one I already I have. I was wondering if I
could set up this new company as a C Corp or LLC and make my
existing S Corp a member, instead of myself. The S Corp will
get paid my share of the income, and I can take my payroll
through the S Corp. That way I only need one SEP plan and
one payroll setup, and can continue to work within my S
Corporation's tax structure. Are there any tax disadvantages
to this, and is this generally an accepted method of
structuring a business relationship?

Thanks,

Robby

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >