Chipper's Golf Resort has the opportunity to buy 1,000 acres of property adjacent to its 18-hole golf course. After talking with her banker, the owner is encouraged to begin the paperwork to change from a limited liability company form of business ownership to a corporation. You applaud this strategy because she will eliminate the problem of double taxation.

Question

Quizplus · Accepted Answer

Changing the form of business ownership from limited liability company to a corporation may provide other benefits such as limited liability for shareholders and easier access to capital but it does not eliminate the problem of double taxation. In fact, corporations are subject to double taxation, as they pay taxes on their profits and then the shareholders pay taxes on the dividends they receive.

Chipper's Golf Resort Has the Opportunity to Buy 1,000 Acres