Q:

Subject: What is your opinion?

 

I have been trying to read up on the best way for our business to go, so I would like your opinion.

We have a poultry and cattle farm.  We have asked a lawyer and our accountant.  The lawyer says s-corp to avoid double taxation and our accountant says c-corp; there won't be much profit after all of our deductions and if there was we could buy something at the end of the year and do section 179.  The accountant also says we are not providing a service for the public and the IRS will not recognize us as a s-corp.

Since we are just getting into this, we really want to go the right way to begin with.  What do you think?

Thanks,

A:

There's no way I can say what would be the appropriate format for you to use.  Only someone who has closely reviewed your current and future situation can do that.

I do find it very unnerving if the quote from your accountant is accurate.  S corps do not have to be service oriented.  S/he may be confusing it with a PSC (personal service corp) because many farms are set up as S corps.

Make sure your lawyer has reviewed the many tax saving opportunities of C corps and isn't just focusing on the perceived double taxation issue to the exclusion of all of those other areas, as far too many lawyers do.

It sounds as if you  may need to consult with a tax pro who better understands how corporations function.

Good luck.

Kerry Kerstetter

 

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 2/05/2006 02:10:00 PM Send this post: