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Thanks! You wrote: "They offer pass-through taxation, which may be more tax efficient in some circumstances". Can you give an example of when it is more tax eff

Thanks! You wrote: "They offer pass-through taxation, which may be more tax efficient in some circumstances". Can you give an example of when it is more tax efficient to be an LLC? Why not start as LLC (for tax benefits), and change to C-Corp when we raise $100,000 from investors?

patio11 9y ago
A trivial example of LLCs being more efficient than C corporations for a sole proprietor is that, if you make a loss your first partial year running an LLC, you can deduct it against your personal income taxes incident to e.g. your employment for part of that year, whereas if you make a loss running a C corp, you would have to carryforward that to get a tax benefit from the loss. I have to stay clear from giving tax/legal advice regarding particular situations, so I'm going to politely decline to answer the second question. Knock on wood, we'll have a better answer than that at some point.