Northwest Brands, Inc., is a small business incorporated in Minnesota. Its one class of stock is owned by twelve members of a single family. Ordinarily, corporate income is taxed at the corporate and shareholder levels. Is there a way for Northwest Brands to avoid this double taxation? Explain your answer

Question

Alfred Pruitt

Business

7 April, 21:42

Northwest Brands, Inc., is a small business incorporated in Minnesota. Its one class of stock is owned by twelve members of a single family. Ordinarily, corporate income is taxed at the corporate and shareholder levels. Is there a way for Northwest Brands to avoid this double taxation? Explain your answer

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Margaret Larson · Answer 1

Answer: Yes

Explanation:

Yes, Northwest Brands can be able avoid the double - income taxation. If Northwest Brands is becomes or gets elected to be treated as an S corporation they might avoid the double taxation. An S corporation has to consist all of the following shareholders must be individual, estates, or trusts. Also, they must not have up to one - hundred (100) shareholders, they must be a local corporation and have only one type of stock. S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.