LLC to S-Corp

[stretch361]

What is the name of your state (only U.S. law)? Michigan

Hello,

I currently have an LLC that is in my name only. I also have an assumed name setup under the LLC. Doing taxes this year, my accountant strongly suggested that I create an S-Corp for these companies for the tax breaks. Reading more into S-Corps, I believe this would be a good option not only for this, but to sell shares in the company. I've heard of cases where you can make an LLC be taxed by the IRS as an S-Corp, but I don't want to do this route.

The question I have is what's the best method to do this? I would like the assumed name I currently have to be the S-Corp name with Inc. on the end. However, I can't just create an S-Corp, since the name has been taken (by my LLC). How do I create an S-Corp, under the assumed name, and transfer all the assets of the LLC to the S-Corp?


Thanks,

Chris Potter
Customer Service Manager
Potter's Gifts

Potter's Gifts - Gifts for everyone!What is the name of your state (only U.S. law)?

 

[FlyingRon]

Please do not advertise your business here.

For Federal income tax purposes, S corps and LLC are the same. The income is passed through and taxed as if you earned it directly. The major difference, is in the case of an S corp you can avoid self-employement tax on some of the money.

Michigan has rather unfavorable treatment of S corps with respect to LLC's for.


There's nothing that you can do that makes the IRS treat the LLC as if it were an S corp or mutate one into another. You'll need to research what your state requires. Often, you'll have to disolve one and create the other.

You should consult an attorney/accountant to figure out what all the tax and state implications are.