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Mis-sold Ppi
I can remember going to my bank in the late 1990s to enquire about a loan for a new car. I`d fell in love with this slinky, silver sports car and being a single male at the time, with plenty of disposable income, I thought I`d treat myself to this flashy kind of motor. The bank eventually approved my loan but I was forced into taking out payment protection insurance at the same time. I`m not sure why I took it out to be honest. I think I felt pressured into taking out the policy because the person whom I spoke at the bank said it strengthen my initial loan application if PPI was in place. Nothing was explained to me about the PPI and how it would cover sickness payments or payments for the loan if I was made redundant. In fact, I think I was Mis-sold Ppi by the bank and had it not been so long ago I would put a claim in against the bank in question. Over the years countless customers have been Mis-sold Ppi policies through the banks. Huge profits could be made out of PPIs so you can see why banks would push them onto their customers. Today people are fighting back. Anyone who thinks they might have been Mis-sold Ppi polices in the past can speak to claims management firms who will take their case on and try to recover as many payments as possible.

If you are going to form a corporation, you might be surprised to learn a ?C? corporation comes with a lot of tax benefits. While this article isn?t intended to replace the advice of a good tax professional, it may serve to open your eyes to the value of a ?C? corporation.

?C? Corporation

The ?C? in C corporation has a few legal ramifications, but it is primary a designation for tax purposes. Put in layman?s terms, the designation simply means the corporation will act as its own tax entity. In contrast, an ?S? corporation acts as a pass through tax entity, pushing its financials down to the shareholder who report the information on their personal tax returns.

The Internet Revenue Code sets out the law on tax and it contains a few juicy provisions for corporations. Lets take a look at one of the advantages.

Incorporating

When a party transfers something of value to another party, the IRS gets interested. It views the receipt of something of value as a taxable event. In simply terms, if you pay me for forming a corporation, I have to report and pay taxes on the money. Since a C Corporation is a stand alone tax entity, what happens when you purchase stock?

You have made arrangements to form a ?C? corporation. Now you have to buy stock in it to become a shareholder. If you exchange money or property for the shares, the IRS takes the position no taxable event occurred. In essence, this means the corporation will not have to report you contribution as part of its revenues. If the money isn?t considered a part of the corporate revenues, no tax must be paid on it.

The exact rules for funding a corporation are a bit more complex. With any tax issue, you can expect there to be roughly fifty exceptions and qualifiers. For instance, if you were to exchange services instead of money for the stock, the above example would not apply. Make sure you speak with a tax professional to handle your particular situation correctly.

In Closing

Many people choose a business entity without considering all relevant aspects. Taxes definitely constitute one of these aspects. Make sure you look into them prior to making your decision.