Question 1. Your client has operated a sole proprietorship for several years and is now interested in reaising capital for expansion. He is considering forming either a C corporatoin or an LLC.
a. Describe the treatment of an LLC and discuss any advantages the LLC offers over eht C corporation.
b. Assume instead the clinet has previously operated the business as a C corporatino. Describe the tax consequences of converting it to an LLC.
Question 2. What is the significance of "hot assets" in the sale or exchange of a partnership interest?