by TheBusinessProfessor | Feb 23, 2025 | Business Taxation
What is the Tax Basis of a Business Entity?Basis is largely a tax concept. By definition, basis is the value that an individual pays for an asset. If the asset is later sold or disposed of for a higher amount, there is a gain. If it is sold for a lower amount, there...
by TheBusinessProfessor | Feb 23, 2025 | Business Taxation
What happens if the business has losses?Business entities with pass-through taxation do not retain losses within the business entity. Losses are passed through to owners based either on the percentage of ownership or pursuant to a special allocation in a partnership....
by TheBusinessProfessor | Feb 23, 2025 | Business Taxation
What tax issues arise when funding a business entity?The salient tax issues when funding a business entity concern the transfer of property to the entity in exchange for an ownership interest, the receipt of value other than an ownership interest, and shareholders...
by TheBusinessProfessor | Feb 23, 2025 | Business Taxation
What happens if the equity received by the shareholder is in exchange for services to the corporation?Providing services to a corporation in exchange for stock is generally a taxable event. Pursuant to IRC Section 83(a), the shareholder receiving the stock will be...
by TheBusinessProfessor | Feb 23, 2025 | Business Taxation
How are Partnerships Taxed?In short, they are not. Partnerships are pass-through tax entities. This means that all profits and losses flow directly through to the partners. The partnership may file an informational tax return, but it does not have liability for or...
by TheBusinessProfessor | Feb 23, 2025 | Business Taxation
What is an Employer Identification Numbers (EIN)?The employer identification number is the method by which businesses transmit tax information to the State and Federal Governments. The Federal Employer Identification Number (FEIN) is issued by the Internal Revenue...
