Entity choice determines more than just liability protection — it drives taxation, payroll obligations, and planning strategies. This CTEC-approved course examines how different structures impact deductions, compensation, and self-employment taxes. Updated with the latest rules, the course explores 2025 excess business loss thresholds, indefinite NOL carryforwards with 80% limits, and expanded hobby loss audit considerations. Through real-world examples — including partnership liquidation scenarios, the David Watson compensation reclassification case, and Mary’s ISO vs. NQO stock option exercise — participants will learn how to apply these rules in practice. The course also reviews OBBBA’s tiered QSBS exclusions, higher lifetime caps, and gross asset threshold changes, equipping professionals with the tools to reduce tax burdens and advise effectively.

Learning Objectives

By the end of this course, you will be able to:

1. Differentiate how income, losses, and distributions are taxed across LLCs, partnerships, S corporations, and C corporations.
2. Apply the 2025 excess business loss thresholds and explain NOL carryforward rules.
3. Identify hobby loss risks under IRC 183, including audit consequences and expense limitations.
4. Analyze payroll tax traps and reasonable compensation standards using case studies.
5. Explain OBBBA’s impact on QSBS exclusions, caps, and asset thresholds.
6. Compare the tax treatment of ISOs and NQOs, including employer and employee consequences.