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Stock is treated as taxable compensation once/as it vests, whether or not the entity is incorporated. Even worse, because the entity is not incorporated, the IRS could treat the stock as a partnership interest. Partnership tax accounting is a goddamn nightmare.

You could find yourself on the hook for thousands of back taxes plus fines if your "virtual corporation" is successful. And that doesn't even include potential state tax liabilities or self-employment taxes.



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