Which of the following organizational forms would be best if the new company owners intend to provide extensive fringe benefits for owners or employees that would not be treated as taxable income to employees?

Question

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Providing extensive fringe benefits that are not treated as taxable income to employees is most feasible through a C corporation as it has the flexibility to offer various benefits to its owners and employees. The corporation pays taxes on its income, and the owners/shareholders pay taxes on their individual income or on the dividends paid to them, but fringe benefits provided by the corporation are tax-deductible and not considered taxable income to the recipients. Sole proprietorship and partnership do not offer the option of providing fringe benefits that are tax-deductible and not taxable income to employees. Limited liability companies also offer some flexibility in fringe benefits, but the tax treatment can vary and be complex.

Which of the Following Organizational Forms Would Be Best If