Assume the same facts as in Problem I:17-33 except Barry and Bart instead are considering the treatment of fringe benefits. Barry and Bart want to provide group term life insurance and accident and health insurance for themselves and their employees and plan to make the premium payments from business funds. Explain any restrictions that apply to each form of business organization.

In problem

Barry and Bart are considering whether to start a new manufacturing business. Alternative forms of business organization being considered include operating as a partnership, a limited liability company, an S corporation, or a C corporation. Barry and Bart are calendar year taxpayers but would like to use a January 31 year-end for the business to obtain an 11-month income deferral. Discuss the implications and restrictions of operating under each alternative form of business organization being considered.