Insured Buy/Sell Agreement for a C CorporationInsured Buy/Sell Agreement for a C Corporation
A guide to the tax aspects
The accounting and tax aspects of a C corporation and a partnership are considerably different. The C corporation structure has two taxes. First, there’s an income tax at the corporate level on the net corporate income or profits. Then, if the corporate profits are subsequently distributed to the stockholders, there’s a second tax because the distribution will be taxed to the stockholder as a dividend.
Also, unlike in a partnership, C corporation stockholders who work for the corporation will be classified as employees and receive employment compensation. That compensation will be taxable to the stockholder/employee and deductible to the corporation. Because the compensation isn’t subject to income tax at the corporate level, it has the e...
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