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Interest or finance charges received from an installment sale are subject to service and other activities business and occupation (B&O) tax.
If you wish to be treated as an S-corporation (Form 1120S for pass-through taxation), you must complete Form 2553 ? Election by a Small Business Corporation within 75 days of forming your business (see Form 2553 Instructions). The IRS doesn't recognize LLCs as a classification for tax purposes.
Gains from the sale of real estate are exempt from the Washington capital gains tax. Long-term gains and losses from the sale of interests in a privately held entity are exempt to the extent the gain is directly attributable to the real estate owned directly by such an entity.
The 2021 Washington State Legislature recently passed ESSB 5096 (RCW 82.87) which creates a 7% tax on the sale or exchange of long-term capital assets such as stocks, bonds, business interests, or other investments and tangible assets. This tax only applies to individuals.
To form an S Corp in California, you must file Form 2553 (Election by a Small Business Corporation) with the IRS and then complete additional requirements with the state of California, including filing articles of incorporation, obtaining licenses and permits, and appointing directors.
The S corporation is the only business tax status that lets you save on Social Security and Medicare taxes while avoiding double taxation. An LLC taxed as an S corp offers the benefits of a corporation while also providing flexibility on income treatment.
You can convert a business entity from one form to another by filing Articles of Conversion with the Secretary of State and paying the appropriate fee. Articles of Conversion will allow you to convert a Washington LLC into a Washington corporation, or vice versa.
What paperwork is required to form an S corp? To form an S corp, you must prepare and file Articles of Incorporation or a Certificate of Incorporation with the proper state authorities. You must also pay filing fees and any applicable initial franchise taxes or other fees.