Dividends paid by LLC taxed as C Corp

[BobH]

If an LLC has elected to be taxed as a C Corp can the LLC pay dividends the same way that an entity formed as C Corp would pay them?

[jklcpa]

Yes, it can.  It will need to issue a 1099-DIV to the recipient(s).  This entity will also have the same issue of double taxation as regular C corps.

Keep in mind that as a C corp this entity can put an owner on payroll, create a deductible expense at the corporate level, and can control the timing of income recognition at the personal level since it is not a flow-through entity.

[Lee B]

Also, with a C Corp you have more flexibility to load up on fringe benefits assuming the business is profitable enough to support the additional cost of the benefits.