Nice article in the Wall Street Journal on how changes in personal capital gains and income tax rates, along with a generous gains exemption in section 1202, have made ‘C’ corporations more attractive for some startups. (WSJ is subscription only but there are other articles on this topic out there.)
“For John Bisges it was a pretty easy decision. The Georgia businessman is launching a new brewery this year with a corporate structure known as a “C corporation.” It could allow him the best of two worlds: A low 21% corporate tax rate created in President Trump’s 2017 tax law, and a generous capital-gains tax exemption championed by President Obama.”
For the first time in a long time it is no longer an automatic decision for a startup to use a pass-through entity.
Please be sure to consult your tax adviser before making this kind of decision …
Cheval M&A
Author: Hillary Stiff is President of Cheval M&A. She has been an investment banker and CFO, completing M&A transactions and arranging financing for a number of companies including NTT/Verio, The Endurance International Group and Web.Com among many others. She has helped complete over 480 successful web hosting, ISP and related transactions and distributes a list of hosting and related companies that are for sale.