Tax treatment for searchers (QSBS vs flow-through LLC)

by a searcher from Western Governors University

1 year ago

Does anyone have a case study of buying a business using the QSBS versus using flow-through entities for search funders? 

On one hand, if you use QSBS you avoid the gain on the business after the sale. However, it requires the business to be a C-corp which means no flow through of losses and potential double taxation on distributions. 

Any thoughts on this? 

Thanks.

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11 comments

professional from Northern Arizona University

Take a few minutes to watch this https://youtu.be/XuR4q94n0x8

1 year ago | like reply | 0 likes

searcher from Massachusetts Institute of Technology - MIT Sloan School of Management

Does having a corporation with stock make fundraising easier than an LLC? (it may). Do you plan to have an employee stock option plan? Might be easier with a corp.

1 year ago | like reply | 0 likes

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