Problem 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.
Problem 2: What is the significance of "hot assets" in the sale or exchange of a partnership interest?