Verified Document

Corporation Ethical Issues With S Essay

This is unlike the C Corporation where shareholders are taxed only when they receive dividends. This provision becomes unethical since it subjects the shareholders to losses and denting of their other sources of income. According to the Internal Revenue Service requirements, all the shareholders are required to make a salary. This implies that all the investors and shareholders are considered employees of the corporation alike, and therefore their wages are equally taxed (AllBusiness, 2012). If the investor offers services to the corporation, he will be additionally considered an employee to that capacity. This remuneration and taxation them becomes unfair since the investor expects returns in a larger scale than the other shareholders.

The solution of the above situation comes in with the distributions to share-holders-employees. It is worth noting that the distribution to shareholders must be included in the shareholders' taxable income during tax calculations. The exception comes in on the FICA tax since the distributions...

As an accountant this is where the equity will be struck as the investors will be allocated higher monies in the form of distributions rather wages. This is appropriate since the investor/employee wears two hats in this scenario; first as an investor then as a shareholder and employee (Tax Lawyers' Blog, 2009).
References

AllBusiness, (2012). The Pros and Cons of S Corporations. Retrieved July 24, 2012 from http://www.allbusiness.com/business-planning/business-structures-corporations/2516-1.html#axzz21bleXMFL

IRS, (2012). S Corporations. Retrieved July 24, 2012 from http://www.irs.gov/businesses/small/article/0,,id=98263,00.html

Tax Lawyers' Blog, (2009). S Corporation Wages and Distributions: Basic Tax Planning. Retrieved July 24, 2012 from http://www.pappasontaxes.com/index.php/2009/05/05/s-corporation-wages-and-distributions-basic-tax-planning/

Sources used in this document:
References

AllBusiness, (2012). The Pros and Cons of S Corporations. Retrieved July 24, 2012 from http://www.allbusiness.com/business-planning/business-structures-corporations/2516-1.html#axzz21bleXMFL

IRS, (2012). S Corporations. Retrieved July 24, 2012 from http://www.irs.gov/businesses/small/article/0,,id=98263,00.html

Tax Lawyers' Blog, (2009). S Corporation Wages and Distributions: Basic Tax Planning. Retrieved July 24, 2012 from http://www.pappasontaxes.com/index.php/2009/05/05/s-corporation-wages-and-distributions-basic-tax-planning/
Cite this Document:
Copy Bibliography Citation

Related Documents

Ethical Issues With Conflict in Workplace
Words: 1049 Length: 3 Document Type: Essay

Ethics in the Workplace The workplace is considered the professional environment which should be characterized, at least in theory, by a high degree of professionalism and a clear distinction between the work environment and mindset and the personal one. In cases of issues related to ethics in the workspace, the line between professional and personal can be breached and in some cases even broken. There are numerous situations in which ethics is

Ethical Issues in International Business
Words: 1649 Length: 4 Document Type: Term Paper

Ethical Issues in International Business In the present scenario, due to the international nature and exposure of every business concerned, companies are nowadays deputing a lot of employees for the purpose of performing overseas assignments. Due to diversity in relation to beliefs, traditions and cultural values and practices from the country of their origin, sometimes the employees may have to experience culture shock and have problems of coping in the country

Ethics Issues on Intellectual Property in E-Business
Words: 2150 Length: 6 Document Type: Term Paper

Ethics Issues on Intellectual Property in E-Business This paper briefly outlines the basics of intellectual property. It also describes the importance of intellectual property in business and then provides a detailed discussion on e-business and intellectual property. The paper will deal with a few cases of infringement to illustrate how intellectual property is important in e-business. Intellectual property is very important to any business. Intellectual property rights including patents and copyrights have

Corporation Ethical Role Foundations Business Ethics: What
Words: 1556 Length: 5 Document Type: Essay

Corporation Ethical Role Foundations business ethics: What role business society? The study business ethics study legal application moral standards business decisions. In defining business ethics, defining voluntary role business: a business behave law dictate conduct law permits conduct benefit shareholders harmful ? Business Ethics: Case Studies Selected Readings (7th Edition) Required Reading: Jennings, M. The problem investigated concerns a comparison of views in what is referred to as a stakeholder's doctrine in

Ethical Issues in Marketing Field
Words: 1907 Length: 6 Document Type: Essay

Ethical Issues in Marketing Field Ethics can be defined as standards employed by people to choose the right course of action amongst diverse, often conflicting possibilities. Ethics are reliant on a logical and rational set of principles to arrive at a decision, which in essence, is a cognitive procedure or practice. Ethical standards are an imperative element for any company or organization, especially in contemporary times, where a progression of the

Ethical Issues in Business Slow
Words: 709 Length: 2 Document Type: Essay

Toyota has been doing so for decades. If the NHTSA officials deliberately ignored possible safety violations in Toyota vehicles, their effect upon the economy would be twofold: firstly, of course, is the problem of the obvious safety hazard this poses for drivers. Second, because Toyota was insulated from bad publicity regarding its brand, unlike American car manufactures, this gave Toyota an unfair competitive advantage and must be cited as one

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now